Sw. Airlines Co. v. Fed. Energy Regulatory Comm'n ( 2019 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 12, 2019 Decided June 14, 2019
No. 18-1134
SOUTHWEST AIRLINES CO. AND AMERICAN AIRLINES, INC.,
PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION AND UNITED
STATES OF AMERICA,
RESPONDENTS
SFPP, L.P.,
INTERVENOR
Consolidated with 18-1136, 18-1137, 18-1138
On Petitions for Review of Orders of the
Federal Energy Regulatory Commission
Steven A. Adducci argued the cause for petitioners. With
him on the briefs were Thomas J. Eastment, Gregory S.
Wagner, Matthew D. Field, and Richard E. Powers Jr.
Anand R. Viswanathan, Attorney, Federal Energy
Regulatory Commission, argued the cause for respondents.
With him on the brief were Robert J. Wiggers and Robert B.
Nicholson, Attorneys, U.S. Department of Justice, James P.
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Danly, General Counsel, Federal Energy Regulatory
Commission, Robert H. Solomon, Solicitor, and Elizabeth E.
Rylander, Attorney. Robert M. Kennedy Jr., Attorney, Federal
Energy Regulatory Commission, entered an appearance.
Charles F. Caldwell argued the cause for intervenor. With
him on the brief were Daniel W. Sanborn, Michelle T.
Boudreaux, and Sabina D. Walia.
Before: TATEL, MILLETT, and KATSAS, Circuit Judges.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: The Federal Energy Regulatory
Commission uses a streamlined “indexing” method to ensure
that when oil pipelines raise their rates, the resulting charges
remain reasonable. Every summer, the Commission calculates
an “index” that reflects inflation between the previous two
calendar years, and pipelines may, through an expedited
process, rely on that index to increase their rates. If a pipeline’s
customers believe that a particular rate increase, though index-
compliant, is still too high, then they may challenge that rate in
a proceeding before the Commission. These consolidated cases
concern the kind of evidence the Commission deems relevant
to such proceedings. In 2014, a group of customers filed
complaints against the 2012 and 2013 index-based rate
increases implemented by pipeline-owner SFPP, L.P. The
Commission, departing from its previous practice, dismissed
those complaints by relying on data generated after the
challenged increases went into effect. Because the Commission
failed to provide sufficient reasons for changing its policy, we
vacate the challenged orders and remand for the Commission
to explain or reconsider its decision to take into account post-
rate-increase information.
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I.
For over a century, oil pipelines have been subject to
regulation as common carriers under the Interstate Commerce
Act. See Act of June 29, 1906, Pub. L. No. 59-337, § 1, 34 Stat.
584, 584 (extending the Interstate Commerce Act’s definition
of “common carriers” to include oil pipelines). For most of this
time, the pipelines’ federal regulators—first the Interstate
Commerce Commission and now the Federal Energy
Regulatory Commission—used complex “fair value” or “cost-
based” ratemaking methodologies, Ass’n of Oil Pipe Lines v.
FERC, 83 F.3d 1424, 1428–29 (D.C. Cir. 1996) (internal
quotation marks omitted), to prevent pipelines from unlawfully
charging “unjust and unreasonable” rates, 49 U.S.C. app.
§ 1(5)(a) (1988). In the Energy Policy Act of 1992, however,
Congress directed the Federal Energy Regulatory Commission
to “streamline [its] procedures” and reduce “unnecessary
regulatory costs and delays” by “establish[ing] a simplified and
generally applicable ratemaking methodology for oil
pipelines.” Pub. L. No. 102-486, §§ 1801(a), 1802(a), 106 Stat.
2776, 3010.
As a result, an “indexing” scheme has replaced cost-of-
service proceedings as the Commission’s primary tool for
regulating pipeline rates. See Revisions to Oil Pipeline
Regulations Pursuant to the Energy Policy Act of 1992, Order
No. 561, 58 Fed. Reg. 58,753, 58,754 (Nov. 4, 1993)
(explaining that the “Commission believes that indexing of oil
pipeline rates will eliminate the need for much future cost-of-
service litigation”). Emphasizing that “the hallmark of an
indexing system is simplicity,” the Commission explained that
pipelines (also called “carriers”) could use the new method to
“adjust [their] rates . . . for inflation-driven cost changes
without the need [for] strict regulatory review of the pipeline’s
individual cost of service.” Id. at 58,758. By permitting the
“nominal level of rates to rise” with “general economy-wide
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costs,” the Commission stated, “indexing, conceptually,
[would] merely preserve[] the value of just and reasonable rates
in real economic terms.” Id. at 58,759.
The nuts and bolts of indexing work like this: For every
“index year,” which runs from July 1 to June 30, the
Commission publishes no later than June 1 an index “based on
the change in the final Producer Price Index for Finished Goods
(PPI-FG) . . . for the two calendar years immediately preceding
the index year.” 18 C.F.R. § 342.3(c), (d)(1), (d)(2). So, for
example, the Commission recently calculated the index for the
twelve-month period spanning July 1, 2019, to June 30, 2020,
by comparing the 2018 PPI-FG to the 2017 PPI-FG. See
Revisions to Oil Pipeline Regulations Pursuant to the Energy
Policy Act of 1992, Notice of Annual Change in the Producer
Price Index for Finished Goods, 167 FERC ¶ 61,122, at 1 (May
10, 2019). Once an index is set, each pipeline then computes
its own maximum allowable rate—its so-called ceiling level—
“by multiplying the previous index year’s ceiling level by the
[Commission’s] most recent index.” 18 C.F.R. § 342.3(d)(1).
A pipeline may “at any time” increase its rates “to a level which
does not exceed [its] ceiling level.” Id. § 342.3(a).
The Commission recognizes that, though efficient, an
indexing scheme based on “economy-wide costs” may at times
produce rates significantly out of step with individual
pipelines’ financial realities. Revisions to Oil Pipeline
Regulations Pursuant to the Energy Policy Act of 1992, 58 Fed.
Reg. at 58,759. For this reason, the Commission permits
pipeline customers (also called “shippers”) to “challenge
existing rates, even if such rates are below the applicable
ceiling levels, if [those customers] reasonably believe such
rates are excessive.” Id. at 58,754. These index-based rate
challenges come in two varieties: protests, which address
proposed rates, and complaints, which address “existing rate[s]
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or practice[s].” 18 C.F.R. § 343.1. In both types of proceedings,
the challenger must “allege reasonable grounds for asserting
. . . that the rate increase is so substantially in excess of the
actual cost increases incurred by the carrier that the rate is
unjust and unreasonable.” Id. § 343.2(c)(1). How the
Commission evaluates those allegations, however, depends on
whether the shipper brings its challenge in the form of a protest
or a complaint.
Because protests proceed extremely quickly—they must
be filed within fifteen days of a rate’s publication, see id.
§ 343.3(a), and the Commission has only thirty days from the
rate’s filing date to “determine whether to . . . initiate a formal
investigation,” id. § 343.3(c)—the Commission evaluates
protests with a “quick snapshot approach” called the
“percentage comparison test,” BP West Coast Products, LLC
v. SFPP, L.P., 121 FERC ¶ 61,141, at PP 6–7 (2007). Using
annual cost data found on page 700 of the pipeline’s “Form No.
6,” the Commission performs the percentage comparison test
by computing “the change in the prior two years’ total cost-of-
service data.” SFPP, L.P., 163 FERC ¶ 61,232, at P 4 (2018);
see also 18 C.F.R. § 357.2 (detailing oil pipelines’ annual
reporting obligations). “[I]f there is [a] 10 percent or more
differential between” the percentage-point change in the
pipeline’s costs and the percentage-point change in its
proposed rate, then “the Commission will investigate [the]
protested indexed rate change.” SFPP, 163 FERC ¶ 61,232, at
P 4; see, e.g., North Dakota Pipeline Co., 163 FERC ¶ 61,235,
at P 11 (2018) (the Commission would investigate a July 2018
index-based rate increase of 4.41% when costs declined by
15.5% from 2016 to 2017).
In contrast to protests, complaints are subject to a two-year
statute of limitations, see 49 U.S.C. app. § 16(3)(b) (1988), and
the Commission enjoys a “more extended time frame in which”
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to consider them, BP West Coast Products, 121 FERC
¶ 61,141, at P 7. As a result, in the context of complaints only,
the Commission interprets the regulatory phrase “substantially
in excess of the [pipeline’s] actual cost increases,” 18 C.F.R.
§ 343.2(c)(1), to “provid[e] for the review of either a
percentage increase or a dollar increase” in costs, BP West
Coast Products, 121 FERC ¶ 61,141, at P 5; see also BP West
Coast Products LLC v. SFPP, L.P., 123 FERC ¶ 61,121, at P 6
(2008) (explaining that “the Commission only applies a
percentage test when reviewing a protest and normally applies
that test for complaints,” but will “use[] a dollar comparison
. . . under . . . limited circumstances”). To determine whether a
pipeline’s “dollar increase” is excessive, the Commission
applies the so-called substantially exacerbate test, under which
a complaint “must show (1) that the pipeline is substantially
over-recovering its cost of service and (2) that the indexed
based [rate] increase so exceeds the actual increase in the
pipeline’s cost that the resulting rate . . . would substantially
exacerbate that over-recovery.” BP West Coast Products, 121
FERC ¶ 61,141, at PP 5, 10. Put simply, an index-based
increase might produce a rate “substantially in excess of the
[pipeline’s] actual cost increases,” id. at P 5, if the pipeline’s
revenues are already significantly higher than its costs and if
its rate increase amplifies that over-recovery.
This case began in June 2014, when several shippers (the
“Shippers”) filed timely complaints alleging that SFPP’s 2012
and 2013 index-based rate increases failed the substantially
exacerbate test. Claiming that SFPP was already over-
recovering its costs at the time it applied its rate increases in
2012 and 2013, the Shippers, citing page 700 data showing that
SFPP’s costs had decreased between the two years preceding
each rate increase, argued that the new, higher rates “would
substantially exacerbate” those over-recoveries. Id. at P 10.
Specifically, the Shippers alleged that (1) SFPP experienced a
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4.48% decrease in costs between 2010 and 2011, yet in 2012 it
implemented a rate increase that would exacerbate its 2011
over-recovery of $18,368,119 by at least $6.9 million; and (2)
SFPP experienced another 0.56% decrease in costs between
2011 and 2012, yet in 2013 it implemented a rate increase that
would exacerbate its 2012 over-recovery of $14,323,805 by at
least $7.15 million.
The Commission dismissed the complaints in December
2016. See Hollyfrontier Refining & Marketing LLC v. SFPP,
L.P., 157 FERC ¶ 61,186, at P 1 (2016). Its logic was simple:
“[n]otwithstanding the application of the 2012 and 2013 index
increases,” the Commission explained, “SFPP’s Page 700s on
file at the time of the complaints show[ed] that the difference
between SFPP’s costs and revenues declined from . . . 2011 [to]
2012 [to] 2013.” Id. at P 9. Consequently, because “the 2012
and 2013 index increases did not, in fact, substantially
exacerbate the pre-existing difference between SFPP’s
revenues and costs,” the Commission concluded that the
complaints “fail[ed] the second part of the ‘substantially
exacerbate’ test.” Id.
In dismissing the complaints, the Commission “reject[ed]
the . . . Shippers’ contention that [it] should only evaluate the
complaints based upon the two years prior to each index
increase, i.e., (a) 2010 and 2011 Page 700 data for . . . [the]
2012 index increase and (b) 2011 and 2012 Page 700 data for
. . . [the] 2013 index increase,” id. at P 10, and instead chose to
consider “the facts available at the time . . . the complaints”
were filed in June 2014, id. at P 9. Acknowledging that it had
“previously held that the only relevant data for evaluating an
index rate change are the data from the two years prior to the
index change,” the Commission stated that it had “applied this
policy when investigating . . . protest[s] within 15 days of the
challenged indexed rate filing.” Id. at P 10. In this proceeding,
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by contrast, the “Shippers waited two years after the 2012 rate
increase and one year after the 2013 index increase to file their
complaints,” so, according to the Commission, “[t]his case
present[ed] different circumstances” than the Commission had
encountered before. Id.
The Commission denied the Shippers’ request for
rehearing in March 2018. See Hollyfrontier Refining &
Marketing LLC v. SFPP, L.P., 162 FERC ¶ 61,232 (2018).
Reiterating that its December 2016 order had “interpret[ed] the
Commission’s rate complaint regulations . . . in a context that
the Commission had not previously had occasion to address”—
that is, a “situation where additional Page 700 data was
available to shed light on the allegations contained in the . . .
Shippers’ complaints”—the Commission explained that “when
shippers delay challenging [index-based] rates for one or two
years, a different process may be employed to take into account
data that became available prior to the complaint.” Id. at
PP 13–14, 16. The Commission “elected to use that data”
because, in its view, “it would be inefficient and inequitable to
‘ignore evidence that was available at the time the . . . Shippers
filed their complaints’ when that information ‘undermines the
basis of the . . . Shippers’ claim.’” Id. at P 14 (quoting
Hollyfrontier Refining & Marketing, 157 FERC ¶ 61,186, at
P 10). The Shippers timely filed petitions for review.
II.
One of the most fundamental principles of administrative
law is that agencies must give reasons for their actions. The
Administrative Procedure Act directs courts to enforce this
obligation by “hold[ing] unlawful and set[ting] aside agency
action[s]” that are “arbitrary” or “capricious,” 5 U.S.C.
§ 706(2)(A), a task that requires courts “not to substitute [their]
judgment for that of the agency” but rather to ensure that
whatever the agency has decided, it has “examine[d] the
9
relevant data and articulate[d] a satisfactory explanation” for
its actions, Motor Vehicle Manufacturers Ass’n v. State Farm
Mutual Automobile Insurance Co., 463 U.S. 29, 43 (1983).
Although “[w]e will . . . uphold a decision of less than ideal
clarity if the agency’s path may reasonably be discerned,” we
may not “attempt . . . to make up for such deficiencies”
ourselves by “supply[ing] a reasoned basis for the agency’s
action that the agency itself has not given.” Id. (internal
quotation marks omitted).
“A full and rational explanation” becomes “especially
important” when, as here, an agency elects to “shift [its]
policy” or “depart[] from its typical manner of” administering
a program. Great Lakes Gas Transmission Ltd. Partnership v.
FERC, 984 F.2d 426, 433 (D.C. Cir. 1993). The agency “need
not demonstrate . . . that the reasons for the new policy are
better than the reasons for the old one,” FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009), but it must at least
“acknowledge” its seemingly inconsistent precedents and
either offer a reason “to distinguish them” or “explain its
apparent rejection of their approach,” Tennessee Gas Pipeline
Co. v. FERC, 867 F.2d 688, 692 (D.C. Cir. 1989). This is not
an especially high bar: “it suffices that the new policy is
permissible under the statute, that there are good reasons for it,
and that the agency believes it to be better, which the conscious
change of course adequately indicates.” Fox Television, 556
U.S. at 515. But however the agency justifies its new position,
what it may not do is “gloss[] over or swerve[] from prior
precedents without discussion.” Greater Boston Television
Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970).
Until this case, when considering protests and complaints
alike, the Commission always relied exclusively on data from
the two calendar years preceding the challenged rate to
determine whether the increase was “substantially in excess of
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the actual cost increases incurred by the carrier.” 18 C.F.R.
§ 343.2(c)(1). But in the orders at issue in this case, the
Commission dismissed the Shippers’ complaints based on
financial data generated after the challenged index-based rates
had taken effect. The Commission concedes as much. See Oral
Arg. Rec. 21:12–26 (conceding that the Commission is
unaware of any previous protest or complaint case in which it
considered post-rate-increase information).
What the parties dispute is just how far the Commission
has journeyed from its previously trodden path. The
Commission tells us that it has done nothing more than
consider the best available information—information which,
given the “unusual circumstance” occasioned by the Shippers’
“filing delay,” happens to include the “more recent and more
representative data” generated by SFPP’s 2012 and 2013
index-based rate increases. Respondent’s Br. 13–15. The
Shippers see things differently. In their view, the
Commission’s “decision does not simply take into account
updated evidence,” but rather “reflects a fundamental change
in the standard for evaluating an index-based rate complaint.”
Petitioners’ Br. 31. For two reasons, the Shippers have the
better of the argument.
First, the Commission has explained that it relies on pre-
rate-increase information not because it lacks more recent
evidence, but rather because prior-year data reflects precisely
what indexing is supposed to measure: cost changes in the
previous year. For example, in a 2009 complaint proceeding
the Commission distinguished “general rate” cases from index-
based challenges by explaining that, “[i]n contrast” to “a
general rate case” that “looks forward,” “[t]he indexing method
looks backward to the prior year.” Tesoro Refining &
Marketing Co. v. SFPP, L.P., 129 FERC ¶ 61,114, at P 17
(2009). “[T]he indexing methodology . . . is based on
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annualized cost changes between two calendar years,” the
Commission elaborated, and as such it “relies on actual
historical costs, not those that may be projected or updated in a
general rate case.” Id. at PP 17–18. Similarly, in a 2012 order
denying a pipeline’s request to reopen and supplement the
record with post-rate-increase information, the Commission
reaffirmed that “[t]he only relevant evidence in indexing cases
is the change in the pipeline’s cost-of-service in the two years
preceding the index increase.” SFPP, L.P., 140 FERC
¶ 61,016, at P 34 (2012). To be sure, the Commission could
have rejected the updated information because, as it now
argues, “continual additions” “once a proceeding has
commenced . . . would be inconsistent with . . . streamlined
ratemaking.” Hollyfrontier Refining & Marketing, 157 FERC
¶ 61,186, at P 10. But that is not the reason the Commission
gave. Instead, it declared that the proffered “later-developed
data [was] irrelevant” because “[w]hen ruling on a proposed
index increase, the Commission confines its inquiry to
comparing the year-to-year change in costs . . . for the two
preceding years.” SFPP, 140 FERC ¶ 61,016, at PP 34, 42.
Indeed, despite this court’s equivocal dictum on the matter, the
Commission’s past practice demonstrates that it has always
employed a backward-looking approach in indexing
proceedings. Compare United Airlines, Inc. v. FERC, 827 F.3d
122, 133 (D.C. Cir. 2016) (stating that “whether [the
Commission’s] indexing mechanism is retrospective or
prospective is unclear”), with Oral Arg. Rec. 21:12–26 (failing
to identify any indexing proceeding in which the Commission
considered post-rate-increase information).
Second, in at least three previous complaint cases, the
Commission focused solely on pre-rate-increase information
from the preceding two years even though post-rate-increase
information was presumably available at the time the
complaints were filed. In one case, the Commission dismissed
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complaints filed in December 2006 and January 2007 against a
pipeline’s 2005 and 2006 index-based rate increases because,
as it concluded, the pipeline permissibly “indexed its . . . rates
on July 1, 2005, to reflect that its costs in 2004 exceeded its
2003 costs” and then imposed a “July 1, 2006[,] index-based
increase” on the basis of “Page 700 [data] for the calendar year
2005 reflect[ing] an increase in costs” from 2004. BP West
Coast Products LLC v. SFPP, L.P., 118 FERC ¶ 61,261, at
PP 8–9 (2007). In another case, the Commission explained that
it would evaluate a complaint filed in 2007 against a 2005
index-based rate “by comparing the costs incurred [by the
pipeline] in the calendar year preceding the index year with the
prior year”—that is, by comparing “the pipeline’s costs in 2004
with the costs incurred in 2003.” BP West Coast Products LLC
v. SFPP, L.P., 119 FERC ¶ 61,241, at P 9 (2007). And in still
another case, the Commission dismissed a 2007 complaint
against a 2006 index-based rate because the pipeline had
demonstrated with its “revised 2005 FERC Form No. 6” that
its “July 2006 . . . index based increase[] did not substantially
exacerbate its current over-recovery.” Tesoro Refining &
Marketing Co. v. Calnev Pipe Line, LLC, 121 FERC ¶ 61,142,
at P 7 (2007).
These three decisions—all cited by the Commission in its
December 2016 order or by the Shippers in their request for
rehearing—belie the Commission’s contention that there was
something particularly unusual about the Shippers’ “delayed
filing” and, as a result, that their complaints “presented
different circumstances” than the Commission “previously had
occasion to address.” Respondent’s Br. 13, 19 (internal
quotation marks omitted). True, as the Commission now points
out, because no party to any of those proceedings expressly
asked the Commission to consider such updated data, these
decisions do not hold that post-rate-increase information is
irrelevant. See Oral Arg. Rec. 21:28–56 (arguing that “the
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question was never teed up”). But regardless of what issues the
litigants raised in those cases, the fact remains that the
Commission repeatedly used pre-rate-increase data to answer
the question at hand—whether the rate increases were
“substantially in excess of the actual cost increases incurred by
the carrier,” 18 C.F.R. § 343.2(c)(1)—even though post-rate-
increase information was available. Challenged by litigants or
not, an agency’s “settled course of behavior embodies [that]
agency’s informed judgment that, by pursuing that course, it
will carry out the policies committed to it by Congress.”
Atchison, Topeka & Santa Fe Railway Co. v. Wichita Board of
Trade, 412 U.S. 800, 807 (1973) (plurality opinion).
Consequently, the Commission’s consistent practice, whether
adopted expressly in a holding or established impliedly through
repetition, sets the baseline from which future departures must
be explained. See id. (plurality opinion) (explaining that
adjudications “generally provide a guide to action that the
agency may be expected to take in future cases”).
Taken together, these cases demonstrate that when the
Commission announced its decision to “consider the data that
[becomes] available” “[w]hen shippers delay . . . in filing a
complaint,” Hollyfrontier Refining & Marketing, 162 FERC
¶ 61,232, at P 18, it was adopting a policy inconsistent with its
earlier course of conduct. Of course, the Commission is free to
“depart from a prior policy or line of precedent” so long as it
“acknowledge[s] that it is doing so and provide[s] a reasoned
explanation.” Louisiana Public Service Commission v. FERC,
772 F.3d 1297, 1303 (D.C. Cir. 2014). But the explanation
offered in the challenged orders misses this mark.
The Commission’s sole justification for its change of heart
boils down to this: “it would be inefficient and inequitable to
ignore evidence that was available at the time the . . . Shippers
filed their complaints.” Hollyfrontier Refining & Marketing,
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162 FERC ¶ 61,232, at P 14 (internal quotation marks omitted).
This justification, however, begs a very important question: is
the available evidence also relevant evidence? As the Shippers
point out, if “the index is designed to recover cost increases for
the period prior to the increase,” then “[d]ata relating to periods
after the effective date of a proposed index rate increase are
irrelevant.” Petitioners’ Br. 23. In other words, by assuming
that any available post-rate-increase information is relevant to
its inquiry, the Commission has reinterpreted—without
acknowledgement or explanation—the phrase “actual cost
increases incurred by the carrier,” 18 C.F.R. § 343.2(c)(1), to
include not only costs incurred before the rate’s filing, but also
costs incurred before the complaint’s filing. See Oral Arg. Rec.
31:50–32:44 (conceding that the challenged orders changed the
Commission’s interpretation of “incurred”). And that
reinterpretation, in turn, calls into question the purpose of
indexing itself. Are index-based rate increases designed to
compensate pipelines for cost increases actually incurred in the
previous calendar year, costs likely incurred in the current
calendar year, or, depending on the type of proceeding, both?
The Commission tells us that we “need not address” the
purpose of indexing in order “to resolve this case.”
Respondent’s Br. 21. To an extent, we agree: we would stray
too far from our judicial function were we to venture a guess
ourselves. See Ass’n of Oil Pipe Lines, 83 F.3d at 1431
(explaining that because “ratemaking . . . involv[es] complex
industry analyses and difficult policy choices,” courts should
be “particularly deferential to the Commission’s expertise”).
But we are not convinced—at least on this record—that the
Commission may, consistent with its obligation to engage in
reasoned decision making, allow the question to go
unanswered. We shall therefore vacate and remand the
challenged orders so that the Commission, should it choose to
maintain its new policy of considering information that
15
becomes available between a pipeline’s rate increase and a
shipper’s complaint, can offer a reasoned explanation that
either persuasively distinguishes or knowingly abandons its
prior inconsistent practice. See Tennessee Gas Pipeline, 867
F.2d at 692 (remanding orders in which the Commission had
“neither acknowledge[d]” apparently inconsistent “precedents
nor purport[ed] either to distinguish them or to explain its
apparent rejection of their approach”). Though expressing no
opinion on how the Commission should apply the substantially
exacerbate test going forward, we emphasize that however the
Commission chooses to proceed, it must explain its actions in
a way that coheres with the rest of its indexing scheme—
namely, the manner in which it establishes yearly indexes and
the methods it uses to evaluate challenges to index-based rates.
In short, the Commission must provide a reasoned explanation
that treats like cases alike.
One final matter requires brief mention. In addition to
arguing that the Commission departed from its prior practice
without adequate justification, the Shippers claim that, on the
same day the Commission issued its March 2018 order, it
issued a different order that undermines the evidentiary basis
for dismissing the Shippers’ complaints. But given that we are
vacating the March 2018 order, we need not reach this
alternative ground for granting the petitions for review. The
Shippers are free to raise this argument on remand.
III.
For the foregoing reasons, we grant the petitions for
review and vacate and remand the Commission’s December
2016 and March 2018 orders for further proceedings consistent
with this opinion.
So ordered.