Public Citizen, Inc. v. FERC , 839 F.3d 1165 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 6, 2016 Decided October 25, 2016
No. 14-1244
PUBLIC CITIZEN, INC.,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
CALPINE CORPORATION, ET AL.,
INTERVENORS
Consolidated with 14-1246
On Petitions for Review of Notices of
the Federal Energy Regulatory Commission
Scott L. Nelson argued the cause for petitioner Public
Citizen, Inc. With him on the briefs was Lynn N. Hargis.
John S. Wright, Assistant Attorney General, Office of the
Attorney General for the State of Connecticut, argued the cause
for State Petitioners. With him on the briefs were Michael C.
Wertheimer, Robert L. Marconi, and Clare E. Kindall,
Assistant Attorneys General, and Elin Katz and Joseph A.
Rosenthal.
2
Robert H. Solomon, Solicitor, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on
the brief was Karin L. Larson.
Paul A. Mezzina argued the cause for intervenors. With
him on the brief were Ashley C. Parrish, David G. Tewksbury,
Abraham H. Silverman, Cortney Madea, Bruce F. Anderson,
Paul Franklin Wight, and John L. Shepherd Jr.
Before: BROWN, SRINIVASAN and WILKINS, Circuit
Judges.
Opinion for the Court filed by BROWN, Circuit Judge.
BROWN, Circuit Judge: In this consolidated case,
Petitioners Public Citizen and Connecticut seek review of two
Notices issued by the Federal Energy Regulatory Commission
as part of ISO New England’s eighth forward-capacity market.
They contend we have jurisdiction because the Notices
constitute either orders under the Federal Power Act or action
unlawfully withheld under the Administrative Procedure Act.
We disagree and dismiss for lack of jurisdiction.
I.
ISO New England (“ISO-NE”) is a private, nonprofit
entity that, among other things, administers New England’s
energy markets. The Federal Energy Regulatory Commission
(“FERC” or “the Commission”) is an independent agency
composed of up to five members appointed by the President.
See 42 U.S.C. § 7171(a)–(b). Among other responsibilities,
FERC has the authority under the Federal Power Act (“the
FPA”) to regulate rates for wholesale electricity. See 16
U.S.C. §§ 824d–824e. A forward-capacity market (“FCM”)
is a particular type of wholesale market for electricity.
3
This case concerns whether FERC’s response to ISO-NE’s
2014 FCM auction (“FCA 8”) ran afoul of its FPA obligations.
We therefore begin by surveying the relevant FPA provisions
and describing the mechanics of an FCM auction.
A.
FPA Section 205(a) states all rates and
charges—including those for wholesale electric
energy—“shall be just and reasonable, and any such rate or
charge that is not just and reasonable is hereby declared to be
unlawful.” 16 U.S.C. § 824d(a).
Sections 205 and 206 provide two mechanisms through
which FERC can fulfill its statutory charge of ensuring the
justness and reasonableness of rates. Section 205 governs the
lawfulness of proposed rates; Section 205(d) requires utilities
to file all proposed changes with FERC, and, “unless the
Commission otherwise orders,” filed rates cannot go into effect
without “sixty days’ notice to the Commission and to the
public.” Id. § 824d(d). Section 205(e) further authorizes
FERC, “either upon complaint or upon its own initiative[,]” to
hold hearings on the lawfulness of proposed rates. Id.
§ 824d(e). “[P]ending such hearing,” it “may” also suspend
the rates for up to “five months beyond the time when [they]
would otherwise go into effect.” Id. Section 206 permits
FERC to review—and third parties to challenge—rates that
have already become effective. Id. § 824e(a).
B.
In 2006, FERC approved a Settlement Agreement and
Tariff permitting ISO-NE to conduct annual FCM auctions.
See Devon Power LLC, 117 F.E.R.C. ¶ 61,133 (2006). The
Settlement Agreement provides for “thorough review of the
final auction clearing prices by the Commission” and any
4
interested parties. Id. at P 93. It further states “[P]arties may
challenge [proposed rates] under the ‘just and reasonable
standard’ and the Commission will address such challenges
under that standard.” Id.
FCMs differ from other energy markets because
“‘[c]apacity’ is not electricity itself but the ability to produce it
when necessary. It amounts to a kind of call option that
electricity transmitters purchase from parties—generally,
generators—who can either produce more or consume less
when required.” Conn. Dep’t of Pub. Util. Control v. Fed.
Energy Regulatory Comm’n, 569 F.3d 477, 479 (D.C. Cir.
2009). ISO-NE’s FCMs are conducted three years in advance
so as to encourage competition and market entry. See
Blumenthal v. Fed. Energy Regulatory Comm’n, 552 F.3d 875,
879 (D.C. Cir. 2014). Thus, in an FCM, electricity providers
do not purchase energy itself, but the option to buy a quantity
of energy three years hence. See id.
In the annual FCM auctions—which set capacity
prices—ISO-NE first determines the net amount of capacity
required by the region. ISO New England, Inc., 148 F.E.R.C.
¶ 61,201 at P 2 (2014). Suppliers willing to provide capacity
submit bids reflecting the lowest price they will accept before
exiting the market for that year. Id. In the ensuing
“descending clock” auction, the price continues to fall and
bidders continue to exit “until the amount of capacity
remaining in the auction is equal to the net Installed Capacity
Requirement.” Id. At this point, the auction terminates, and
“all resources remaining in the auction receive capacity
obligations at the auction clearing price.” Id. However,
“[u]nder some circumstances relating primarily to the
sufficiency of competition within the auction, [capacity prices]
may be administratively determined by ISO-NE.” Id. at P 2
n.4.
5
ISO-NE conducted FCA 8 on February 3, 2014. On
February 28, pursuant to its Tariff obligations, it filed the
auction results with FERC for review under FPA Section 205.
See Devon Power LLC, 117 F.E.R.C. ¶ 61,133 at P 78. Due to
insufficient competition, the auction defaulted to
administrative pricing rules, and it resulted in regional capacity
price increases from approximately $1.2 billion to
approximately $3 billion over one year.
On April 14, Petitioners filed a timely objection to the
rates, 1 arguing they resulted from the unilateral exercise of
market power. Subsequently, Petitioners each requested
FERC affirmatively determine whether FCA 8’s rates were just
and reasonable and assess whether the market was unduly
manipulated during the auction. In response, on June 27,
FERC issued ISO-NE a deficiency letter requesting additional
information concerning the auction. ISO-NE provided the
information on July 17.
Sixty-one days later, on September 16, 2014, FERC’s
Secretary issued a Notice acknowledging the FCA 8 rates had
become effective by operation of law pursuant to FPA Section
205.2 Individual statements released by the Commissioners
revealed FERC—which at the time was composed of only four
Commissioners—had deadlocked about whether to approve
the rates or set them for hearing. In a joint statement, two
Commissioners concluded the Settlement Agreement required
1
ISO-NE’s Tariff states third parties must file objections with
FERC within forty-five days of ISO-NE filing the auction results.
2
FERC also issued an order under FPA Section 206 requiring
ISO-NE to make certain prospective revisions to its Tariff. ISO
New England, Inc., 148 F.E.R.C. ¶ 61,201 at P 12. It also
investigated a specific utility’s bidding behavior, ultimately
concluding the behavior was justified. Id. at P 11.
6
FERC to examine the reasonableness of the auction rates
because evidence suggested FCA 8 had been influenced by the
exercise of market power. The other two—one of whom was
FERC’s current Chairperson—would have approved the rates.
According to the Chairperson, as long as ISO-NE had
conducted the auction in accordance with a FERC-approved
tariff, the Commission lacked authority to assess justness or
reasonableness.
Petitioners separately filed for rehearing. The Secretary
issued a second Notice explaining the first Notice was not a
Commission Order and, consequently, the requests for
rehearing “[did] not lie.” J.A. 154. Petitioners’ cases were
consolidated before this Court, where they now ask us to
review the Notices as final orders under FPA Section 313(b).
Alternatively, they argue the FPA compels FERC to set
challenged rates for a hearing and prevents FERC from
permitting unjust rates to take effect; the Commission’s failure
to perform either duty constitutes action unlawfully withheld
under the Administrative Procedure Act (“APA”). See 5
U.S.C. § 706(1). Under either theory of jurisdiction,
Petitioners contend FERC’s reasons for permitting FCA 8’s
rates to become effective were arbitrary and capricious. See
id. § 706(2). They therefore ask this Court to remand with
instructions to FERC to assess the justness and reasonableness
of FCA 8’s rates.
II.
At the outset, we must fulfill our “independent obligation
to assure ourselves that jurisdiction is proper.” Plains
Commerce Bank v. Long Family Land & Cattle Co., 554 U.S.
316, 324 (2008). As we have explained, “[a] federal court’s
subject-matter jurisdiction . . . extends only so far as [the]
Congress provides by statute,” Friends of the Earth v. U.S.
EPA, 333 F.3d 184, 187 (D.C. Cir. 2003), and is “strictly
7
limited to the agency action(s) included therein.”
NetCoalition v. Sec. Exch. Comm’n, 715 F.3d 342, 348 (D.C.
Cir. 2013). Since jurisdiction grants the “power to declare the
law,” Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1868), it
is incumbent upon us to determine we are acting within the
sphere of our legitimate authority.
A.
Petitioners first seek review of the secretarial Notices as
orders under FPA Section 313(b), which permits “[a]ny party
. . . aggrieved by an order issued by the Commission . . . [to]
obtain a review of such order.” 16 U.S.C. § 825l(b). They
advance three arguments as to why Section 313(b)
encompasses FERC’s actions here, all of which fail.
Petitioners begin by correctly noting that, in various
contexts including the FPA, we have previously defined
“order” expansively to include “any agency action capable of
review on the basis of the administrative record.” Inv. Co.
Inst. v. Bd. of Governors of the Fed. Reserve Sys., 551 F.2d
1270, 1278 (D.C. Cir. 1977) (emphasis added); Kan. Power &
Light Co. v. Fed. Power Comm’n, 554 F.2d 1178, 1181 n.4
(D.C. Cir. 1977). However, here, Petitioners cannot
demonstrate FERC engaged in agency action; they therefore
cannot seek recourse under this broad definition.
As a preliminary matter, FERC’s enabling statute provides
at least three Commissioners must be present to constitute a
quorum and “[a]ctions of the Commission shall be determined
by a majority vote of the members present.” 42 U.S.C.
§ 7171(e). These requirements comport with the “almost
universally accepted common-law rule” that only a “majority
of a collective body is empowered to act for the body.” Fed.
Trade Comm’n v. Flotill Prods., Inc., 389 U.S. 179, 183
(1967). They also accord with this Court’s recognition that an
8
agency’s authority runs to it as “an entity apart from its
members, and it is its institutional decisions—none other—that
bear legal significance.” Pub. Serv. Comm’n of N.Y. v. Fed.
Power Comm’n, 543 F.2d 757, 776 (D.C. Cir. 1974).
Thus, whether analyzed under the statutorily-prescribed
requirements for Commission action or under general
institutional principles, we reach the same conclusion: FERC
did not engage in collective, institutional action when it
deadlocked on FCA 8’s rates. Consequently, the Notices
describing the effects of that deadlock are not reviewable
orders under the FPA. See Sprint Nextel Corp. v. FCC, 508
F.3d 1129, 1131–32 (D.C. Cir. 2007) (concluding FCC
deadlock was not “agency action” and the press release
describing the deadlock was “purely informational”); AT&T
Corp. v. FCC, 369 F.3d 554, 556 (D.C. Cir. 2004) (finding a
Notice describing the effects of a statutory sunset provision to
be a nonreviewable agency action because it described
something that occurred “‘by operation of law,’ not by
Commission action”).
The very definition of “deadlock” reinforces our
conclusion. Webster’s defines deadlock as “a state of inaction
. . . resulting from the opposition of equally powerful
uncompromising . . . factions.” MERRIAM-WEBSTER’S
COLLEGIATE DICTIONARY 319 (11th ed. 2009); see also 4
OXFORD ENGLISH DICTIONARY 290 (2d ed. 1989) (defining
deadlock as “[a] condition or situation in which it is impossible
to proceed or act; a complete standstill”). By its very terms,
then, the nature of a deadlock confirms FERC neither reached a
collective decision nor engaged in an “action” of any kind.
Petitioners nevertheless urge us to apply our treatment of
deadlocks under the Federal Election Campaign Act
(“FECA”). See Fed. Election Comm’n v. Nat’l Republican
9
Senatorial Comm., 966 F.2d 1471, 1476 (D.C. Cir. 1992).
There, we have held the Federal Election Commission (“FEC”)
engages in final agency action when, after receiving a
complaint alleging certain types of campaign finance
violations, it deadlocks about whether probable cause exists to
proceed with an investigation. Id. “[T]o make judicial
review a meaningful exercise,” we treat the statements of the
Commissioners voting to dismiss the complaint as the
administrative record. Id.
As does the FPA with FERC, FECA requires FEC to act
by majority vote. See 52 U.S.C. § 30106(c); id.
§ 30109(a)(2). But, there are other obvious and significant
differences between FECA and FPA.
First, FECA’s text explicitly permits review of
probable-cause deadlocks as agency action. Unlike FPA
Section 313(b), FECA allows “[a]ny party aggrieved by an
order of the Commission dismissing a complaint filed by such
party . . . or by a failure of the Commission to act on such
complaint” to seek judicial review. 52 U.S.C.
§ 30109(a)(8)(A) (emphases added). Further, FEC cannot
investigate complaints absent majority vote, see id.
§ 30109(a)(2), meaning the statute compels FEC to dismiss
complaints in deadlock situations. See also Nat’l Republican
Senatorial Comm., 966 F.2d at 1476. Therefore, recognizing
FECA deadlocks as agency action does not require this Court
to broaden its statutorily-defined jurisdiction; the treatment of
probable cause deadlocks as agency action is baked into the
very text of the statute.3 See also Hispanic Leadership Fund,
Inc. v. Fed. Election Comm’n, 897 F. Supp. 2d 407, 428 (E.D.
Va. 2012) (finding unreviewable an FEC deadlock about
3
We recognize Petitioners also believe FPA compels FERC to act.
As described infra Part II.B., we find that argument similarly
unavailing.
10
whether advertisements constituted prohibited election
communications because, unlike deadlocks leading to the
dismissal of private complaints, it resulted “only in the FEC
concluding that it was unable to reach a determination”).
Second and more generally, Congress uniquely structured
the FEC toward maintaining the status quo, increasing the
appropriateness of recognizing deadlocks as agency action in
that specific context. As an initial matter, FEC always
includes six Commissioners, distinguishing it from the vast
majority of agencies with an odd number of members. No
more than three FEC Commissioners may be affiliated with the
same political party. 52 U.S.C. § 30106(a)(1). The voting
and membership requirements mean that, unlike other
agencies—where deadlocks are rather atypical—FEC will
regularly deadlock as part of its modus operandi. Taken
together, FEC’s structural design and FECA’s legal
requirement to dismiss complaints in deadlock situations mark
FECA as an exception to the rule. Absent a similar
congressional indication in the FPA or FERC’s enabling
statute, the FEC approach should not be imported here.
Finally, Petitioners seek to expand our FPA jurisdiction by
invoking the “strong presumption that Congress intends
judicial review of administrative action.” Amador Cty. v.
Salazar, 640 F.3d 373, 379 (D.C. Cir. 2011). It bears
emphasizing, however, that this presumption applies only to
“final agency action.” See Bowen v. Mich. Acad. of Family
Physicians, 476 U.S. 667, 670 (1986); 16 CHARLES ALAN
WRIGHT, ET AL., FEDERAL PRACTICE & PROCEDURE § 3942.
As just described, FERC did not engage in agency action at all,
let alone final agency action.
Final agency action is that which “mark[s] the
consummation of the agency’s decisionmaking process.”
11
Bennett v. Spear, 520 U.S. 154, 177–78 (1997). Further, it
must determine rights and obligations or result in legal
consequences. Id. at 178; see also Papago Tribal Util. Auth.
v. Fed. Energy Regulatory Comm’n, 628 F.2d 235, 239 (D.C.
Cir. 1980) (noting courts may review an interlocutory order
issued by FERC if it is “definitive” and “imposes an obligation,
denies a right, or fixes some legal relationship as a
consummation of the administrative process”). Here, the
presumption does not attach because the deadlock does not
reflect an agency decision that fully resolved the issue or
completed the process. See Consummate, BLACK’S LAW
DICTIONARY (10th ed. 2014). In fact, it did quite the opposite,
leaving FERC mired in indecision and impasse. Thus, the
deadlock lacks the requisite finality for the presumption to
apply.4
4
Petitioners rely on the “practical” considerations that have
previously guided our reviewability determinations, see Papago,
628 F.2d at 239, but these considerations do not alter our conclusion.
As relevant here, Petitioners note that, under FPA Section 205,
FERC carries the burden of demonstrating the reasonableness of
rates, see 16 U.S.C. § 824d(e); that burden shifts to challengers
under Section 206. See id. § 824e(b). Further, per the Settlement
Agreement’s terms, Section 206 challenges are governed by the
Mobile-Sierra “public interest” test, which Petitioners contend
constitutes a more stringent legal standard. See Potomac Elec.
Power Co. v. Fed. Energy Regulatory Comm’n, 210 F.3d 403, 407–
09 (D.C. Cir. 2000). Petitioners argue these differences will work
irreparable injury to them should this Court deny review here. We
disagree. Section 206 proceedings may in some ways be less
amenable to Petitioners, yet the fact remains an avenue of review is
available to them. FERC has represented that nothing in its prior
orders precludes Petitioners from pursuing relief under Section 206.
Additionally, practical and prudential considerations, however
compelling, cannot provide the basis for our jurisdiction absent
demonstrated final agency action and clear congressional authority.
12
In sum, we hold FERC’s deadlock does not constitute
agency action,5 and the Notices describing the effects of the
deadlock are not reviewable orders under the FPA.6
See NetCoalition, 715 F.3d at 348; see also S. Ry. Co. v. Seaboard
Allied Milling Corp., 442 U.S. 444 (1979) (finding an order issued
by the Interstate Commerce Commission unreviewable even though
doing so meant challengers had to proceed under a statutory section
that offered different remedies and shifted the burden of proof to
challengers).
5
The lack of collective action attributable to the entire Commission
distinguishes this case from our decisions in Cajun Electric Power
Cooperative, Inc. v. Federal Energy Regulatory Commission, 28
F.3d 173 (D.C. Cir. 1994), and City of Batavia v. Federal Energy
Regulatory Commission, 672 F.2d 64 (D.C. Cir. 1982). In Cajun
Electric, FERC issued an order approving proposed tariffs as
reasonable after receiving timely challenges to filed tariffs. 28 F.3d
at 175–76. In Batavia, FERC as a body issued an order adopting a
“mistaken belief . . . about its investigative authority.” 672 F.2d at
75, 77.
6
Petitioner Connecticut stresses the importance of reading the FPA
“in context” with the Settlement Agreement’s review provision.
Pet’r Jepsen Br. 23–24; see Devon Power LLC, 117 F.E.R.C.
¶ 61,133 at P 93. Specifically, Connecticut suggests reading “order”
in Section 313(b) too literally would “be in violation of” the
Settlement Agreement. Pet’r Jepsen Br. at 23. Petitioner is
incorrect. Determining our subject-matter jurisdiction is not a
contextual inquiry, capable of case-by-case expansion or
contraction. Rather, it involves a factual inquiry into the objective
limits of our Congressionally-defined power to act. Our
determination, properly grounded, is incapable of “violating”
anything.
13
B.
We next consider whether the APA confers jurisdiction
over Petitioners’ claims.
The APA permits judicial review of agency action,
including the failure to act. See 5 U.S.C. §§ 551(13), 702.
Inaction is reviewable only where the agency fails to take a
“discrete” action it is legally required to take. Norton v. S.
Utah Wilderness All., 542 U.S. 55, 62–63 (2004). Action is
“legally required” if the statute provides a “specific,
unequivocal command” to an agency or “a precise, definite act
. . . about which [an official has] no discretion whatever.” Id.
at 63 (discussing the connection between the reviewability of
inaction and the writ of mandamus). Accordingly, this Court
has imposed “strict limits” on reviewable inactions. Anglers
Conservation Network v. Pritzker, 809 F.3d 664, 670 (D.C.
Cir. 2016).
Thus, here, we ask whether the FPA compelled FERC
either to set the disputed rates for hearing or to affirmatively
prevent any unjust and unreasonable rates from going into
effect. The parties disagree about which case controls this
question.
Petitioners proffer Amador County v. Salazar, 640 F.3d
379 (D.C. Cir. 2011), where this Court assessed the Secretary
of the Interior’s responsibilities under the Indian Gaming
Regulatory Act (“IGRA”). IGRA authorizes no-action
approvals of proposed gaming compacts which, after 45 days,
“shall be considered to have been approved by the Secretary,
but only to the extent the compact is consistent with the [Act’s]
provisions.” 25 U.S.C. § 2710(d)(8)(C) (emphasis added).
This Court found the latter clause demonstrated “Congress
[had] limited the extent to which a compact could be approved
by operation of law,” thus obligating the Secretary to
14
“affirmatively disapprove” any compacts violating the limit.
Id. at 382. Petitioners contend FPA Section 205(a)’s
pronouncement that “any such rate or charge that is not just and
reasonable is hereby declared to be unlawful” imposes an
analogous duty upon FERC to disapprove any unjust or
unreasonable rate. 16 U.S.C. § 824d(a).
By contrast, FERC analogizes these facts to Sprint Nextel
Corp. v. FCC. There, this Court assessed the reviewability of
an FCC deadlock under a provision of the Communications
Act stating a forbearance petition “shall be deemed granted” if
the FCC does not deny it within a statutorily-prescribed period.
Sprint Nextel, 508 F.3d at 1131–32. We noted that, because
the FCC acts by majority vote, “[t]ies . . . do not result in
Commission action.” Id. at 1132. Instead, the petition was
granted “by operation of law.” Id. As such, the deadlock
was unreviewable, since “[t]he Commission did not engage in
any circumscribed, discrete” act; rather, “Congress, not the
Commission, ‘granted’ [the] forbearance petition.” Id. at
1131–32.
We conclude Sprint Nextel controls. Section 205(a)’s
statement concerning the unlawfulness of unjust and
unreasonable rates does not rise to an inexorable command like
that found in IGRA. See also Meina Xie v. Kerry, 780 F.3d
405, 406, 408 (D.C. Cir. 2015) (holding a statutory provision
stating “immigrant visas . . . shall be issued . . . in the order in
which a petition . . . is filed with the Attorney General” had
“establish[ed] a specific principle of temporal priority that
clearly reins in the agency’s discretion”). It does not compel
FERC to engage in nondiscretionary activity either by
commanding FERC to set disputed rates for a hearing or by
mandating FERC disapprove any unjust or unreasonable rates.
Instead, it functions as a stand-alone, declarative statement,
reiterating the FPA’s overall goal of proscribing unjust and
15
unreasonable rates. Thus, we conclude the FPA does not
mandatorily obligate FERC to engage in either of Petitioners’
desired actions.
Our conclusion is buttressed by the Supreme Court’s
interpretation of the Interstate Commerce Commission’s
(“ICC”) duties under the Interstate Commerce Act (“ICA”).
In Southern Railway Co. v. Allied Seaboard Milling Corp., the
Court held the ICC’s decision not to investigate challenges
levied against proposed seasonal rate increases unreviewable.
442 U.S. 444, 446, 448 (1979). Southern Railway concerned
a direct review statute rather than the APA; however, the
marked structural and linguistic similarities between the FPA
and ICA nevertheless render the Court’s reasoning and
conclusions instructive. See Papago, 628 F.2d at 243
(indicating Southern Railway’s germaneness to FERC and the
FPA).
At the time the Court decided Southern Railway, the ICA
contained three notable similarities to the FPA. First, like
FPA Section 205(a), the ICA stated “[a]ll charges made for any
service rendered or to be rendered in the transportation of
passengers or property . . . shall be reasonable and just; and
every unjust and unreasonable charge for such service is . . .
declared to be unlawful.” 24 Stat. 379. Second, ICA Section
15(8)(a) mirrored FPA Section 205(e) by providing that, upon
receipt of a proposed rate schedule, “the Commission may,
upon the complaint of an interested party or upon its own
initiative, order a hearing concerning the lawfulness of such
rate.” 90 Stat. 31. Third, in another provision analogous to
FPA Section 205(e), ICA Section 15(8)(b) authorized the
Commission to suspend a proposed schedule for seven months
“[p]ending a hearing.” Id.
16
After receiving the complaint at issue in Southern
Railway, the ICC engaged in some corrective action with the
railroads, but also issued an order declining to either set the
rates for a hearing or temporarily suspend the rates. 442 U.S.
at 449–50. In holding the no-investigation decision
unreviewable, the Court pointed to the statute’s use of
“permissive” language in Section 15(8)(a), as well as its lack of
“standards to guide both the Commission in exercising its
authority and the courts in reviewing that exercise.” Id. at
456. Though not squarely addressed, the ICC’s declaration of
the unlawfulness of unjust and unreasonable rates did not alter
the Court’s conclusion that the ICA afforded the Commission
unreviewable discretion over investigation decisions.
Section 205(e)’s language grants FERC similar discretion,
stating it “shall have authority” to hold hearings and that it
“may” suspend rates. 16 U.S.C. 824d(e). Likewise, it
contains no standards cabining FERC’s discretion or enabling
this Court to meaningfully review how the Commission
exercises its discretion. Taken together, Sprint Nextel and
Southern Railway lead us to hold the FPA did not compel
FERC to either set the disputed rates for hearing or
affirmatively disapprove any unjust or unreasonable rates
through the Section 205 process. Since the action was not
legally required, we have no jurisdiction under the APA.7
7
Our recent decision in Xcel Energy Services v. Federal Energy
Regulatory Commission, 815 F.3d 947 (D.C. Cir. 2016), does not
undermine our holding. There, FERC entered an order accepting a
Tariff revision notwithstanding its conclusion that the proposed rates
“may not be just and reasonable.” Id. at 950–51. FERC later
“acknowledged that it erred as a matter of law in allowing [the]
proposed rates to take effect . . . despite the acknowledged need for
further section 205 review.” Id. at 953. We held “where the
Commission acknowledges that it acted contrary to section 205[,] . . .
17
III.
We conclude by repeating what we initially recognized in
Sprint Nextel: “because a deadlocked vote is unreviewable, we
lack jurisdiction in what may be the hardest cases.” 508 F.3d
at 1133. And so it is with Petitioners. FERC approved a
Settlement Agreement providing, “[P]arties may challenge
[proposed rates] under the ‘just and reasonable standard’ and
the Commission will address such challenges under that
standard.” Devon Power LLC, 117 F.E.R.C. ¶ 61,133 at P 93.
Not only did the deadlock prevent FERC from accomplishing
this review, but the Commission Chairperson disclaimed
authority to engage in any review whatsoever, so long as
ISO-NE conducted the auction in accordance with its tariff.
This interpretation seems questionable at best. And yet,
without jurisdiction, we simply lack the power to assess its
validity. Any unfairness associated with this outcome inheres
in the very text of the FPA. Accordingly, it lies with
Congress, not this Court, to provide the remedy.
Since neither the FPA nor the APA grants us the power to
hear these claims, we are compelled to “dismiss[] the cause.”
Ex parte McCardle, 74 U.S. (7 Wall.) at 514.
So ordered.
its initial rate order is ultra vires.” Id. at 956. Xcel is
distinguishable on two relevant grounds. First, it involved an
undisputedly final agency action reached by majority vote. Second,
it addressed a fundamentally different question from that presented
in this case. Whereas we consider FERC’s Section 205 obligations
as an initial matter, Xcel addresses FERC’s statutory duties once it
has affirmatively determined the proposed rates may be unlawful.
Since FERC never reached a similar conclusion here, Xcel does not
govern.