State Water Contractors v. Federal Energy Regulatory Commission

MEMORANDUM^**

1. When a rate or an aspect of a rate that has been previously approved by FERC is later challenged, the complainant has the burden of showing that it is unlawful. See 16 U.S.C. § 824e(b), FPA § 206. The “flat” transmission rate challenged by petitioners was not a feature newly introduced by Amendment 27 to the ISO Tariff. Rather, the concept of the flat rate had already been approved by FERC. Pac. Gas & Elec. Co., 81 FERC ¶ 61,122 at 61,504 (1997); Cal. Indep. Sys. Operator Corp., 106 FERC ¶ 63,026 at 65,268-69 (2004), rev’d in part on other grounds, Cal. Indep. Sys. Operator Corp., 109 FERC If 61,301 at 62,468 (2004). Therefore, FERC properly allocated to petitioners the burden of proving that the flat rate is unlawful.

2. FERC’s approval of the flat transmission rate as just, reasonable and not unduly discriminatory and its rejection of petitioners’ contention that time-dependent rates are required is supported by substantial evidence. See Port of Seattle v. PERC, 499 F.3d 1016, 1026 (9th Cir.2007). 3. FERC’s approval of the flat transmission rate and its rejection of petitioners’ contention that time-dependent rates are required is not arbitrary and capricious. A time-dependent rate is not required under either federal caselaw or agency precedent. FERC’s decision did not violate the agency’s policy of requiring rates to convey price signals; FERC found that the ISO Tariffs flat-rateplus-congestion-fee model sends the proper price signals, Cal. Indep. Sys. Operator Corp., 111 FERC ¶ 61,337 at 62,500 (2005), and this finding was supported by substantial evidence. See Port of Seattle, 499 F.3d at 1026. And although FERC had previously recognized that the congestion management system was flawed, Cal. Indep. Sys. Operator Corp., 90 FERC If 61,006 at 61,-013 (2000), the agency was within its discretion to address such flaws in a separate proceeding. See Mobil Oil Exploration & Producing Se., Inc. v. United Distrib. Cos., 498 U.S. 211, 230, 111 S.Ct. 615, 112 L.Ed.2d 636 (1991).

PETITION DENIED.

** This disposition is not appropriate for publication and is not precedent except as provided by 9 th Cir. R. 36-3.