Bangor Hydro-Electric Co. v. Federal Energy Regulatory Commission

D.H. GINSBURG, Circuit Judge,

concurring in part and dissenting in part:

In its petition for rehearing before the FERC, Bangor presented not one of the numerous arguments it now urges upon the court in support of the proposition that the NEPOOL and Yankee services are firm. Before the agency, Bangor made only the following bare assertion that the NEPOOL service is firm:

*238[U]nder § 13.2 of the NEPOOL agreement, PSNH is obligated to transfer ownership interests or unit contract entitlements in pool planned units. Surely this obligation represents a firm transmission obligation.

Its claim that the Yankee service is firm was similarly brief and unsupported by argument:

PSNH also provides transmission service for Maine Yankee, Connecticut Yankee and Massachusetts Yankee under separate transmission arrangements, similar to service provided for pool planned units under the NEPOOL agreement.

Nor did Bangor present any argument in favor of either proposition in its Motion for Reconsideration, nor attach a copy of the relevant agreements, nor argue that Ocean State is inconsistent with a finding that the NEPOOL service is non-firm. Thus, at no time during the FERC proceedings did Bangor make the arguments it relies upon here.

Under § 313(b) of the Federal Power Act, “[n]o objection to [an] order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission in [an] application for rehearing unless there is reasonable ground for the failure to do so.” 16 U.S.C. § 825i (b). Whether a party can be said to have made its “objection” in a petition for rehearing depends upon the degree of generality permitted. Section 313(a) of the Act states that the application for rehearing shall set forth “specifically” the grounds upon which it is based. 16 U.S.C. § 8251(a).

As this court has stated of the identically worded provision in the Natural Gas Act, “[t]he obvious and salutary purpose” of such an exhaustion requirement “is to afford the Commission an opportunity to bring its knowledge and expertise to bear on an issue before it is presented to a generalist court.” Northwest Pipeline Corp. v. FERC, 863 F.2d 73, 77-78 (D.C. Cir.1988). Keeping this purpose in mind, I cannot find that the three sentences I have quoted above from Bangor’s Request for Rehearing afforded the FERC a sufficient opportunity to consider the several specific arguments, based upon ambiguous contract language and arguably relevant precedent, that Bangor now presses upon the court in forty pages of briefs.

Bangor argues that it “had no way of knowing that the Commission would rely on an erroneous determination that the Yankee and pool-planned unit transmission services were non-firm, until the Commission’s order denying reconsideration.” If so, then Bangor may not be faulted for its failure to argue (as opposed to merely asserting its position on the firm/non-firm issue) prior to the time that the FERC determined that the transmission services are non-firm.

It does not follow, however, that we may consider Bangor’s arguments for the first time here. The exhaustion requirement of the Federal Power Act requires a petitioner for review first to file an application for further rehearing of an order on rehearing “when the later order ... raises objections ... that are substantially different from those raised against the original one.” Town of Norwood v. FERC, 906 F.2d 772, 775 (D.C.Cir.1990). Therefore, if Bangor was blindsided by the FERC’s unexpected reliance upon an earlier finding, in another case, that the disputed services are non-firm, then it should have petitioned the agency to rehear that issue.

As for Bangor’s argument that the agency’s 1990 decision denying reconsideration is inconsistent with a statement in its 1988 decision in Ocean State, it should be dis-positive that Bangor raised the issue of inconsistency with that case for the first time in its reply brief here. Therefore, the court could not properly consider the objection even if it had been raised before the agency. “Considering an argument advanced for the first time in a reply brief ... is not only unfair to an appellee, but also entails the risk of an improvident or ill-advised opinion on the legal issues tendered.” McBride v. Merrell Dow and Pharmaceuticals, Inc., 800 F.2d 1208, 1211 (D.C.Cir.1986) (citation omitted). Bangor’s extreme and unexplained tardiness has deprived the FERC of any opportunity — ei*239ther below or in this court — to reconcile this case with Ocean State.

Moreover, Bangor’s failure to argue inconsistency with Ocean State in its opening brief prevented the FERC from objecting in its brief to Bangor’s making that argument for the first time on appeal. Contrary to the court’s statement, see Ct.Op. at n. *, however, FERC counsel did make this point at oral argument:

[Ocean State ] was only mentioned in the reply brief ... and was not brought to the Commission’s attention. And it was not brought to my attention either in the — in the initial brief. And so I have to apologize to the court for not — for not dealing with that case, but it didn’t come up before the reply brief.

In response to a question regarding the FERC’s failure to give consideration in its opinion to Ocean State as well as to Boston Edison, counsel replied:

I still would have to say, however, that I think it’s a different situation when the matter is brought to the Commission’s attention than when it’s not, and in this case, it wasn’t.

In these circumstances, I think it clear that the court is without jurisdiction over any of Bangor’s objections except its objection to the competitive effect of the Commission’s decision. With regard to that claim, I concur in the court’s disposition.