Justia Utilities Law Opinion Summaries

Petitioners seek review of FERC's determination that various energy companies committed tariff violations in California during the summer of 2000. As part of a deregulation program, California created two nonprofit entities: the California Power Exchange Corporation (“CalPX”) and the California Independent System Operator Corporation (“Cal-ISO”). Both entities were subject to FERC jurisdiction, with CalPX operating pursuant to a FERC-approved tariff and wholesale rate schedule. The Cal-ISO tariff comprehensively regulated California’s power markets, and incorporated the Market Monitoring and Information Protocol (“MMIP”), which set forth rules for identifying and protecting against abuses of market power. The court concluded that FERC’s determination that Shell, MPS, and Illinova (“sellers”) violated the Cal-ISO tariff and MMIP during the Summer Period was not arbitrary, capricious, or an abuse of discretion. In this case, FERC reasonably interpreted the Cal-ISO tariff and the MMIP according to the plain text of those documents. Therefore, the court rejected the sellers’ claims that the tariff and MMIP did not proscribe the practices identified by the agency. Furthermore, FERC’s interpretation of the Cal-ISO tariff and the MMIP finds support not only in text, but in policy as well. The court concluded that FERC reasonably interpreted the Cal-ISO tariff and the MMIP to prohibit the practices of False Export, False Load Scheduling and Anomalous Bidding. In addition, the agency reasonably concluded that the tariff and MMIP sufficed to put sellers on notice that such practices were not permitted. The court also concluded that FERC reasonably concluded that the sellers engaged during the Summer Period in the practices deemed tariff violations by the orders on review. Finally, the court concluded that FERC’s Summer Period determinations regarding APX and BP were not arbitrary, capricious, or an abuse of discretion. Accordingly, the court denied the petitions for review in part and dismissed in part. View "MPS Merchant Serv. v. FERC" on Justia Law

Petitioners challenged several FERC orders that were issued following the court's remand in Port of Seattle v. FERC. The key issue on appeal is the applicability of the Mobile-Sierra doctrine, which requires FERC to “presume that the rate set out in a freely negotiated wholesale-energy contract meets the ‘just and reasonable’ requirement” imposed by law. The court concluded that it has jurisdiction only as to the issue of whether FERC erred by invoking the Mobile-Sierra doctrine and that it lacks jurisdiction to review FERC’s evidentiary orders. The court held that FERC reasonably applied Mobile-Sierra to the class of contracts at issue and that FERC's interpretation is reasonable. In this case, FERC’s baseline assumption that the presumption applies to the contracts at issue is not unreasonable in light of Morgan Stanley Capital Grp., Inc. v. Pub. Util. Dist. No. 1. Accordingly, the court denied the petition with respect to petitioners' claim that the Mobile-Sierra presumption cannot apply to the spot sales at issue and dismissed the evidentiary challenges for lack of jurisdiction. View "State of California v. FERC" on Justia Law