LA Engy & Power Auth v. FERC

                        United States Court of Appeals


                     FOR THE DISTRICT OF COLUMBIA CIRCUIT


Argued January 22, 1998                                     Decided April 24, 1998


                                 No. 97-1098


                    Louisiana Energy and Power Authority, 

                                  Petitioner


                                      v.


                    Federal Energy Regulatory Commission, 

                                  Respondent


                  Central Louisiana Electric Company, Inc., 

                               Intervenor for 

                                  Respondent


                   On Petition for Review of Orders of the 

                     Federal Energy Regulatory Commission


     Milton J. Grossman argued the cause for petitioner, with 
whom Wallace Edward Brand was on the briefs.



     Timm L. Abendroth, Attorney, Federal Energy Regulatory 
Commission, argued the cause for respondent, with whom 
John H. Conway, Deputy Solicitor, was on the brief.

     John T. Stough, Jr., and Thadd A. Prisco were on the brief 
for intervenor Central Louisiana Electric Company, Inc.

     Before:  Williams, Henderson and Garland, Circuit 
Judges.

     Opinion for the Court filed by Circuit Judge Garland.

     Garland, Circuit Judge:  The Federal Power Act requires 
that all rates demanded by public utilities for the transmis-
sion or sale of electric energy be "just and reasonable."  16 
U.S.C. s 824d(a).  Where there is a competitive market, the 
Federal Energy Regulatory Commission (FERC) may rely on 
market-based rates in lieu of cost-of-service regulation to 
ensure that rates satisfy this requirement.  Cf. Elizabethtown 
Gas Co. v. FERC, 10 F.3d 866, 870 (D.C. Cir. 1993) (discuss-
ing "just and reasonable" rate requirement of Natural Gas 
Act).  Under its precedents, the Commission approves appli-
cations to sell electric energy at market-based rates only if 
the seller and its affiliates do not have, or adequately have 
mitigated, market power 1 in the generation and transmission 
of such energy, and cannot erect other barriers to entry by 
potential competitors.  See, e.g., Heartland Energy Servs., 
Inc., 68 FERC p 61,223 at 62,060 (1994);  Louisville Gas & 
Elec. Co., 62 FERC p 61,016 at 61,143-44 (1993).

     Without holding an evidentiary hearing, FERC approved 
an application by Central Louisiana Electric Company  
(CLECO) to sell electric energy at market-based rates.  Lou-
isiana Electric & Power Authority (LEPA), a competitor and 
customer of CLECO, challenges that approval as arbitrary 
and capricious, arguing that CLECO does in fact have market 

__________
     1  FERC defines market power as a seller's ability to "signifi-
cantly influence price in the market by withholding service and 
excluding competitors for a significant period of time."  Citizens 
Power & Light Corp., 48 FERC p 61,210 at 61,777 (1989).



power.2  LEPA's express concern is that by leaving CLECO's 
rates unregulated, the Commission has freed CLECO to use 
predatory pricing 3 to lure away LEPA's customers.  
CLECO, on the other hand, argues that LEPA's "true mo-
tive" is not to prevent predatory pricing, but rather "to force 
CLECO to sell ... at a higher price, so that LEPA itself can 
sell at a higher [noncompetitive] price without losing load to 
CLECO."  Our review is limited to determining whether 
FERC's decision was "arbitrary, capricious, an abuse of 
discretion, or otherwise not in accordance with law."  Michi-
gan Consol. Gas Co. v. FERC, 883 F.2d 117, 120 (D.C. Cir. 
1989) (quoting 5 U.S.C. s 706(2)(A)).  Because the Commis-
sion's approval of CLECO's application for market-based 
rates was none of these, we deny the petition for review.

                                      I


     FERC interposes a threshold objection to LEPA's petition, 
asserting that LEPA is not a party "aggrieved" by the 
Commission's order and hence not entitled to petition for 
judicial review under the Federal Power Act, 16 U.S.C. 
s 825l.  A party is "aggrieved" under this statute if it satis-
fies both the constitutional and prudential requirements for 
standing.  See Liquid Carbonic Indus. Corp. v. FERC, 29 
F.3d 697, 701-04 (D.C. Cir. 1994);  cf. Moreau v. FERC, 982 
F.2d 556, 564 (D.C. Cir. 1993) (interpreting similar language 
in Natural Gas Act).  As the Supreme Court recently has 
restated, the three constitutional requirements are:

__________
     2  LEPA does not challenge FERC's general policy of permit-
ting market-based rates in the absence of market power.

     3  The Supreme Court has stated that "[p]redatory pricing may 
be defined as pricing below an appropriate measure of cost for the 
purpose of eliminating competitors in the short run and reducing 
competition in the long run."  Cargill, Inc. v. Monfort of Colorado, 
Inc., 479 U.S. 104, 117 (1986).  The Court has left unresolved the 
appropriate measure of such "cost."  See id. at 117-18 n.12;  Brooke 
Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 
222-23 & n.1 (1993).  Here, LEPA variously describes the predato-
ry pricing about which it is concerned as pricing below "incremental 
cost" and as pricing "substantially below costs."



     (1) that the plaintiff have suffered an "injury in fact"--
     an invasion of a judicially cognizable interest which is (a) 
     concrete and particularized and (b) actual or imminent, 
     not conjectural or hypothetical;  (2) that there be a causal 
     connection between the injury and the conduct com-
     plained of--the injury must be fairly traceable to the 
     challenged action of the defendant, and not the result of 
     the independent action of some third party not before the 
     court;  and (3) that it be likely, as opposed to merely 
     speculative, that the injury will be redressed by a favor-
     able decision.

Bennett v. Spear, 117 S. Ct. 1154, 1163 (1997).  The pruden-
tial requirement relevant here is that "the interest sought to 
be protected by the complainant is arguably within the zone 
of interests to be protected or regulated by the statute" in 
question.  Id. at 1167.

     LEPA counters that it is in fact a party "aggrieved" by the 
Commission's order.  It alleges that it will be injured by the 
increased price competition from CLECO that will flow from 
FERC's unlawful lifting of regulatory controls.  And in sup-
port of its contention that such pricing will be predatory, 
LEPA asserts a history of oligopolistic collusion in which 
CLECO participated, alleges a relatively recent example of 
predatory pricing by the oligopoly, and presents an expert's 
opinion that the oligopoly will continue to exercise substantial 
market power.

     FERC did not contest in its brief, and at oral argument 
explicitly conceded, that as a competitor and customer LEPA 
comes within the zone of interests of the Federal Power Act 
and hence has prudential standing to challenge the grant of 
CLECO's application.  The Commission contends, however, 
that LEPA has failed to satisfy the "injury in fact" require-
ment for constitutional standing.  More specifically, it con-
tends that LEPA's injury remains "conjectural or hypotheti-
cal" because LEPA has not demonstrated that predatory 
pricing, as opposed to lower competitive pricing, "will occur" 
under CLECO's new tariff.  LEPA must wait to sue, FERC 
argues, until it actually is injured by predatory pricing on the 
part of CLECO.



     But LEPA will be injured by increased price competition 
from CLECO regardless whether that pricing turns out to be 
predatory, as LEPA warns, or simply competitive, as CLECO 
promises.4  Such injury gives LEPA an "actual" and "immi-
nent," rather than "conjectural or hypothetical," interest suf-
ficient to establish injury in fact.  Moreover, that injury also 
satisfies the other two constitutional requirements not con-
tested here:  it is fairly traceable to FERC's decision freeing 
CLECO to price at market-based rates;  and it would be 
redressed by a favorable decision of this court vacating 
FERC's order.  See Panhandle Producers & Royalty Owners 
Ass'n v. Economic Regulatory Admin., 822 F.2d 1105, 1108 
(D.C. Cir. 1987).

     We repeatedly have held that parties suffer constitutional 
injury in fact when agencies lift regulatory restrictions on 
their competitors or otherwise allow increased competition.  
See, e.g., MD Pharm., Inc. v. DEA, 133 F.3d 8, 11 (D.C. Cir. 
1998) ("increased competition represents a cognizable Article 
III injury") (quoting Liquid Carbonic, 29 F.3d at 701);  Old 
Town Trolley Tours, Inc. v. Washington Metro. Area Transit 
Comm'n, 129 F.3d 201, 202 (D.C. Cir. 1997);  First Nat'l Bank 
& Trust Co. v. National Credit Union Admin., 988 F.2d 1272, 
1275 (D.C. Cir. 1993);  Associated Gas Distribs. v. FERC, 899 
F.2d 1250, 1258 (D.C. Cir. 1990);  Investment Co. Inst. v. 
FDIC, 815 F.2d 1540, 1543 (D.C. Cir. 1987);  see also Invest-
ment Co. Inst. v. Camp, 401 U.S. 617, 620-21 (1971).  The 
lifting of such restrictions alone is generally sufficient, and we 
have not required litigants to wait until increased competition 
actually occurs.  As we said in Associated Gas Distributors, 

__________
     4  There is, of course, another possibility:  if the asserted oligo-
poly truly does have market power, it could price above rather than 
below the competitive price--the typical concern of classical oligo-
poly theory.  See generally Paul A. Samuelson & William D. 
Nordhaus, Economics 532-36 (12th ed. 1985);  Donald S. Watson, 
Price Theory and Its Uses 413-41 (3d ed. 1972).  Under this 
scenario, LEPA-as-competitor would be helped rather than harmed 
by FERC's decision, and hence would not suffer injury;  LEPA-as-
customer, on the other hand, would be injured.  No party urges this 
scenario here, however.



"petitioners sufficiently establish their constitutional standing 
by showing that the challenged action authorizes allegedly 
illegal transactions that have the clear and immediate poten-
tial to compete with the petitioners' own sales.  They need 
not wait for specific, allegedly illegal transactions to hurt 
them competitively."  899 F.2d at 1259 (emphasis added).  
Accord Panhandle Producers, 822 F.2d at 1108 (competitors 
will suffer injury in fact from agency order permitting in-
crease in gas supply because "such an increase in supply is 
likely to depress the prices that [competitors] can secure").

     None of this renders irrelevant the plausibility of LEPA's 
claim that predatory pricing will result from FERC's deci-
sion.  But whether that pricing is likely to be predatory or 
simply competitive is a question that goes to the merits of 
FERC's decision to permit market-based rates and not to 
constitutional standing.5  As we discuss below, LEPA's alle-

__________
     5  Theoretically, it is also the kind of question that could be 
relevant to prudential standing.  See Steel Co. v. Citizens for a 
Better Env't, 118 S. Ct. 1003, 1014 n.2 (1998) (citing National R.R. 
Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 
453, 456 (1974), for the proposition that "the merits inquiry and the 
statutory standing inquiry often 'overlap' ").  It is plain that the 
antitrust laws, for example, "were enacted for the protection of 
competition not competitors."  Brunswick Corp. v. Pueblo Bowl-O-
Mat, Inc., 429 U.S. 477, 488 (1977) (internal quotation omitted).  
But the same cannot be said about the all-pervasive regulatory 
schemes of the Federal Power Act and similar statutes.  See 
Panhandle Producers, 822 F.2d at 1109 (holding that competitors 
have standing to challenge importation order under Natural Gas 
Act, and noting difference from standing under antitrust laws);  see 
also National Credit Union Admin. v. First Nat'l Bank & Trust 
Co., 118 S. Ct. 927, 933 (1998) ("competitors of financial institutions 
have [prudential] standing to challenge agency action relaxing stat-
utory restrictions on the activities of those institutions");  Associat-
ed Gas Distribs., 899 F.2d at 1259 (prudential standing of competi-
tors under Natural Gas Act);  Regular Common Carrier Conference 
v. United States, 793 F.2d 376, 379 (D.C. Cir. 1986) ("competitive 
injury is included within the zone of interests protected by the 
Interstate Commerce Act").  Here, FERC does not dispute that 



gation that FERC's decision will lead to predatory pricing, 
like its claim that a company with as much market power as 
CLECO should not be freed of price regulation, is the core of 
LEPA's argument that FERC's order was arbitrary and 
capricious, and hence unlawful.  A party need not prove that 
the agency action it attacks is unlawful, however, in order to 
have standing to level that attack.6  As we said in Claybrook 
v. Slater, 111 F.3d 904, 907 (D.C. Cir. 1997), "[w]hether a 
plaintiff has a legally protected interest (and thus standing) 
does not depend on whether he can demonstrate that he will 
succeed on the merits.  Otherwise, every unsuccessful plain-
tiff will have lacked standing in the first place."  To be sure, 
claims that are "entirely frivolous," Steel Co. v. Citizens for a 
Better Env't, 118 S. Ct. 1003, 1014 n.2 (1998), or have "no 
foundation in law," Claybrook, 111 F.3d at 907, are insuffi-
cient to establish standing.  LEPA's allegations, however, 
cannot be characterized as frivolous, and FERC does not 
suggest otherwise. 

     Nor are LEPA's claims unripe under our decision in North-
ern Indiana Public Service Co. (NIPSCO) v. FERC, 954 F.2d 
736 (D.C. Cir. 1992).  In that case, NIPSCO challenged a 

__________
both concerns, predation and competition, come within the zone of 
interests of the Federal Power Act.

     6  See Allen v. Wright, 468 U.S. 737, 751 (1984) (holding that the 
"core component" of constitutional standing is that "plaintiff must 
allege personal injury fairly traceable to the defendant's allegedly 
unlawful conduct ...") (emphasis added);  Old Town Trolley, 129 
F.3d at 202 (petitioner does not have to prove the public interest 
claim required to defeat a competitor's entry on the merits in order 
to pass the threshold of standing);  Associated Gas Distribs., 899 
F.2d at 1258 ("Those who must compete with allegedly illegal 
commercial transactions have Article III standing to challenge a 
regulatory order authorizing the transactions.") (emphasis added);  
In re Thornburgh, 869 F.2d 1503, 1511 (D.C. Cir. 1989) ("the 
[redressability prong of the standing] test assumes that a decision 
on the merits would be favorable");  see also Steel Co., 118 S. Ct. at 
1014 n.2 ("[t]he Article III requirement of remediable injury in fact 
... except with regard to entirely frivolous claims ... has nothing 
to do with the text of the statute relied upon");  id. at 1011, 1013.



FERC order approving an open-access transmission tariff for 
a neighboring utility, contending that open-access transmis-
sions through that utility would put additional stress on 
NIPSCO's own facilities.  We accepted FERC's interpreta-
tion of its order as approving "merely the concept and outline 
of open-access but [not as giving] ... final authorization to 
conduct any open-access transactions."  Id. at 738, 740.  On 
that basis, we held NIPSCO's claims "premature" and not 
ripe.  Id. at 740.  We indicated, however, that "NIPSCO's 
claims probably would be ripe" if "the orders [had] autho-
rize[d] [the neighboring utility] to provide open-access service 
without further FERC action."  Id. at 738.  In this case, 
FERC clearly has authorized CLECO to sell power at  
market-based rates "without further FERC action."  FERC's 
order permitted CLECO's market-based tariff "to become 
effective on October 8, 1996," subject only to certain revisions 
it ordered CLECO to make within 15 days.  Central Louisi-
ana Elec. Co., 77 FERC p 61,020 at 61,074 (1996).7  The 
revisions were made, see LEPA Br. at 4, the order is effec-
tive, and CLECO is now free to compete with LEPA at 
market-based rates.  Hence, there is nothing premature 
about LEPA's challenge.8

                                      II


     Although LEPA has standing and its claims are ripe, its 
case fails on the merits.  In approving CLECO's application, 

__________
     7  FERC's order also requires CLECO to report market-based 
transactions, as well as "change[s] in status that would reflect a 
departure from the characteristics the Commission has relied upon 
in approving market-based pricing."  77 FERC p 61,020 at 61,074.  
That the Commission may subsequently act on such reports does 
not render LEPA's current challenge unripe.  Any such subsequent 
agency action would involve a new proceeding.

     8  Cf. Cajun Elec. Power Coop., Inc. v. FERC, 28 F.3d 173, 177-
80 (D.C. Cir. 1994) (rejecting FERC argument that it was "prema-
ture[ ]" for the court to consider whether the agency's approval of 
cost-recovery provisions would have an anticompetitive effect be-
cause affected parties could still challenge recovery of such costs in 
particular cases).



the Commission concluded that CLECO lacked market power 
in the generation of electric energy, and that by filing an 
open-access transmission tariff (discussed further below), 
CLECO mitigated its market power over transmission.  
LEPA first challenges FERC's definition of the relevant 
market for generation.9  We need not review that extended 
challenge here, however, because even if LEPA's showing 
were strong enough to overcome the deference due FERC's 
expert judgment on the matter, cf. National Aviation Trades 
Ass'n v. Civil Aeronautics Bd., 420 F.2d 209, 213-14 (D.C. 
Cir. 1969) (deferring to Civil Aeronautics Board's definition of 
product market), the issue is essentially moot.  LEPA does 
not dispute that even under its own definition of the relevant 
market, CLECO's market share is still too low (8.7%) to 
justify a finding of disqualifying market power under FERC's 
precedents, see Louisville Gas, 62 FERC p 61,016 at 61,146 
(finding that market shares of less than 20% are low enough 
to demonstrate lack of market power), or to suggest that 
CLECO has sufficient market power to engage in predatory 
pricing, see Cargill, Inc. v. Monfort of Colorado, Inc., 479 
U.S. 104, 119 n.15 (1986) (noting that 20.4% market share is 
probably insufficient to sustain predatory pricing, and citing 
authorities indicating that 60% or more would be necessary).

     Because under any definition CLECO lacks sufficient mar-
ket power on its own, LEPA is compelled to argue that 
CLECO is part of an oligopoly that controls 86% of the 
market.  LEPA asserts that the members of the oligopoly 
have refrained from competing for each other's customers in 
the past, are unlikely to compete in the future notwithstand-
ing changes in the regulatory environment, and hence provide 

__________
     9  LEPA argues that the Commission's market analysis was 
flawed because it did not separately evaluate generation dominance 
in the market for requirements power, which it defines as "power 
sold by bulk suppliers to retail distributors with a complete assur-
ance of availability."  Central Louisiana Elec. Co., 77 FERC  
p 61,020 at 61,072.



the market structure necessary to support predatory pricing.  
FERC rejects this assertion as "broad and unsubstantiated."  
Central Louisiana Elec. Co., 78 FERC p 61,089 at 61,325 
(1997) (order denying rehearing).  That characterization 
seems appropriate.  The only evidence LEPA advances to 
support its claim is the affidavit of an economics expert.  See 
Joint Appendix ("J.A.") 54-94.  But the expert's theoretical 
conclusion that the relevant market is dominated by a "tight 
oligopoly" whose members do not compete with each other is 
concededly based entirely on undocumented assertions of 
historical fact by LEPA's former general manager.  Cf. 
Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 
509 U.S. 209, 242 (1993) ("When an expert opinion is not 
supported by sufficient facts to validate it ..., it cannot 
support a jury's verdict.").  Moreover, although the expert 
characterizes the market structure as a tight oligopoly, he 
does not address whether that structure's components are 
sufficient to satisfy the specific prerequisites for successful 
predatory pricing--indeed, he does not mention the prospect 
of future predatory pricing at all.  Cf. id. at 226 ("Determin-
ing whether recoupment of predatory losses is likely requires 
... a close analysis of ... the structure and conditions of the 
relevant market.").  And while LEPA filed a complaint in a 
separate FERC proceeding asserting a past instance of pred-
atory pricing, the administrative law judge who heard the 
case rejected LEPA's claim, see Central Louisiana Elec. Co., 
70 FERC p 63,015 (1995), and the facts of that proceeding are 
not before us.  Given the well-recognized difficulties faced by 
an oligopoly attempting to coordinate a predatory pricing 
scheme among multiple firms, see Brooke Group, 509 U.S. at 
227-28, and the absence of any evidence from LEPA address-
ing those difficulties in the specific context of the market at 
issue here, we find reasonable FERC's conclusion that there 
are no market-power considerations that should bar  
CLECO's application to sell at unregulated rates.  See gener-
ally K N Energy, Inc. v. FERC, 968 F.2d 1295, 1303 (D.C. 



Cir. 1992) (acknowledging "substantial deference" owed to 
FERC "in matters predictive and economic").10

     We also find reasonable FERC's further argument that 
even if CLECO had participated in oligopolistic behavior in 
the past, the Commission's new open-access transmission 
rules have transformed the competitive environment.  Those 
rules seek to break a utility's monopoly over the transmission 
of electric power by requiring that the utility permit whole-
sale sellers to transmit power over its facilities under the 
same terms and conditions as the utility itself transmits 
power.  See Promoting Wholesale Competition Through Open 
Access Non-Discriminatory Transmission Services by Public 
Utilities ("Order No. 888"), 61 Fed. Reg. 21,540, 21,540-42 
(1996).11  Thus, competitors outside the current, alleged oligo-
poly will now be able to transmit power into CLECO's 
territory on nondiscriminatory terms.  Whatever may have 
been their past practices, FERC believes that this change 
renders it unlikely that "energy suppliers will decline to 
participate in the emerging competitive markets."  Central 
Louisiana Elec. Co., 77 FERC p 61,020 at 61,073.  This is the 
kind of reasonable agency prediction about the future impact 
of its own regulatory policies to which we ordinarily defer.   
See Michigan Pub. Power Agency v. FERC, 963 F.2d 1574, 
1580 (D.C. Cir. 1992) ("agencies are afforded wide deference 
in predicting the likelihood of future events");  Environmen-
tal Action, Inc. v. FERC, 939 F.2d 1057, 1064 (D.C. Cir. 1991) 

__________
     10  We also note petitioner's statement at oral argument that 
Entergy, Inc., the largest member of the alleged oligopoly with a 
70% market share, already has received FERC approval to price at 
market rates and that LEPA, pursuant to a settlement, will not 
challenge that approval.  LEPA has not explained how FERC's 
approval of market rates for CLECO (with only an 8.7% market 
share) would materially affect the likelihood of predation under 
these circumstances.

     11  Order No. 888 has been challenged in petitions for review 
filed with the Second Circuit, which recently ordered the litigation 
transferred to this Circuit.  See New York v. FERC, No. 97-4034 
(2d Cir. Feb. 26, 1998).  The validity of Order No. 888 is not before 
us in this case.



("it is within the scope of the agency's expertise to make such 
a prediction about the market it regulates, and a reasonable 
prediction deserves our deference notwithstanding that there 
might also be another reasonable view");  Michigan Consol.  
Gas, 883 F.2d at 124 ("Making predictions is clearly within 
the Commission's expertise and will be upheld if rationally 
based on record evidence.") (citations and internal quotations 
omitted).

     Indeed, in the context of LEPA's fears of predatory pric-
ing, this change in the competitive environment is particularly 
potent.  It means that CLECO will not be able to price below 
cost to drive LEPA out of business, and then rely on the 
forbearance of its oligopoly partners to allow it to recoup its 
predatory losses by pricing supracompetitively.  However 
much those partners might be willing to cooperate (which 
would itself require a difficult allocation of present losses and 
future gains), they will be unable to prevent other potential 
competitors from transmitting power into the area if prices 
become supracompetitive.  Yet, without an expectation of 
successful recoupment, a rational seller is unlikely to under-
take a course of predatory pricing.  See Matsushita Elec. 
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588-89 (1986).

     Finally, FERC notes that should the Commission's san-
guine predictions about market conduct turn out to be incor-
rect, LEPA can file a new complaint for any abuses of market 
power that do occur.  See Central Louisiana Elec. Co., 77 
FERC p 61,020 at 61,073.  While this escape hatch might be 
insufficient if LEPA had shown a substantial likelihood that 
FERC's predictions would prove incorrect,12 it provides an 
appropriate safeguard against the uncertainties of FERC's 
prognostications where there has been no such showing.13  
On the record before us, the likelihood is that competition and 
consumer welfare will be enhanced rather than undercut by 

__________
     12  See Cajun Elec., 28 F.3d at 177-80;  Michigan Pub. Power, 
963 F.2d at 1581.

     13   See Environmental Action v. FERC, 996 F.2d 401, 410 (D.C. 
Cir. 1993);  Michigan Pub. Power, 963 F.2d at 1579-81.



the ability of CLECO to sell at market-based rates, and 
hence the direction in which FERC has chosen to err, if it 
errs at all, seems perfectly reasonable.  Cf. Cargill, 479 U.S. 
at 122 n.17 ("because cutting prices in order to increase 
business often is the very essence of competition ... mistak-
en inferences [of predatory conduct] ... are especially cost-
ly") (internal quotation omitted);  Brooke Group, 509 U.S. at 
224 ("unsuccessful predation is in general a boon to consum-
ers");  Richard J. Pierce, Jr., Antitrust Policy in the New 
Electricity Industry, 17 Energy L.J. 29, 34-41 (1996).

                                     III


     We also reject LEPA's allegation that it was arbitrary and 
capricious for FERC to approve CLECO's application with-
out first holding an evidentiary hearing.  In general, the 
Commission must hold an evidentiary hearing "only when a 
genuine issue of material fact exists, and even then, FERC 
need not conduct such a hearing if [the disputed issues] may 
be adequately resolved on the written record."  Cajun Elec. 
Power Coop., Inc. v. FERC, 28 F.3d 173, 177 (D.C. Cir. 1994) 
(internal quotations and citations omitted).  We will reverse 
FERC's decision to deny an evidentiary hearing only for an 
abuse of discretion.  See id. 

     Contrary to LEPA's claims, this is not a case like Cajun 
Electric, where the record revealed a substantial factual 
dispute as to whether a FERC-approved tariff truly mitigated 
a utility's monopoly power, see id. at 175, and where the 
Commission "ignored this important question" and "failed to 
adequately explain its approval," id. at 180.  Here, FERC 
neither ignored LEPA's concerns about market power, nor 
failed to explain adequately why they did not carry the day.  
Moreover, because LEPA conceded that even under its defi-
nition of the relevant market, CLECO by itself did not 
possess market power, the only arguably disputed material 
fact was whether CLECO was a member of a historical 
oligopoly capable of supporting a predatory pricing scheme.  
That assertion may well have been so unsubstantiated as to 
justify a decision on the written record.   See Michigan Pub. 



Power, 963 F.2d at 1583 (FERC "need not launch a full 
investigation just because a party cries 'anticompetitive be-
havior' ").  But regardless of its validity, that claim, too, was 
rendered nonmaterial by FERC's conclusion that the advent 
of open-access transmission tariffs made such historical con-
duct a poor predictor of future competitive behavior.  That 
left only the question whether FERC's own prediction about 
the competitive future was reasonable.  And in light of the 
considerations discussed in Part II above, that was an issue 
the Commission could readily resolve against LEPA on the 
written record.  Cf. id.;  Louisiana Ass'n of Indep. Producers 
& Royalty Owners v. FERC, 958 F.2d 1101, 1113-14 (D.C. 
Cir. 1992).

     In sum, we find neither FERC's approval of CLECO's 
market-based tariff, nor its decision to render that approval 
without an evidentiary hearing, arbitrary or capricious.  Ac-
cordingly, we deny LEPA's petition for review.