Colorado Office of Consumer Counsel v. F.E.R.C.

• Decision Date: 22 June 2007
• Docket Number: No. 04-1238.,04-1238.
• Citation: 490 F.3d 954
• Parties: COLORADO OFFICE OF CONSUMER COUNSEL, et al., Petitioners v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent American Gas Association, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

490 F.3d 954

COLORADO OFFICE OF CONSUMER COUNSEL, et al., Petitioners v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent American Gas Association, et al., Intervenors.

No. 04-1238.

United States Court of Appeals, District of Columbia Circuit.

Argued March 14, 2007.

Decided June 22, 2007.

On Petitions for Review of Orders of the Federal Energy Regulatory Commission.

Lynn N. Hargis argued the cause for petitioners. With her on the briefs was Gerald A. Norlander.

Robert H. Solomon, Solicitor, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the brief were John S. Moot, General Counsel, and Michael E. Kaufmann, Attorney.

Scott H. Angstreich argued the cause for intervenors. With him on the brief

were David C. Frederick, Brendan J. Crimmins, Paul W. Fox, John D. McGrane, Edward H. Comer, Gary D. Bachman, Cheryl Feik Ryan, Howard E. Shapiro, John T. Stough, Jr., and Kevin M. Downey. Andrea M. Kearney, Erin M. Murphy, and Charles V. Garcia entered appearances.

Before: ROGERS, TATEL and GRIFFITH, Circuit Judges.

Opinion for the Court filed PER CURIAM.

PER CURIAM.

In a proceeding under section 206 of the Federal Power Act (FPA), the Federal Energy Regulatory Commission determined that anticompetitive and market manipulative practices were making market-based electricity transmission rates unjust and unreasonable. See Investigation of Terms and Conditions of Public Utility Market-Based Rate Authorizations, 97 F.E.R.C. ¶ 61,220, at 61,974-75 (2001) (initiating section 206 proceeding); Investigation of Terms and Conditions of Public Utility Market-Based Rate Authorizations, 103 F.E.R.C. ¶ 61,349, at 62,373-74 (2003) (asserting that investigation discovered "fraudulent or otherwise anticompetitive" energy trading strategies utilized first by the Enron Corporation and later by "a broad cross-[s]ection of the industry"); Investigation of Terms and Conditions of Public Utility Market-Based Rate Authorizations, 105 F.E.R.C. ¶ 61,218, at 62,142 (2003) (determining that "sellers' existing tariffs and authorizations" would be unjust and unreasonable "without clearly-delineated rules of the road to govern market participant conduct"). As a remedy, the Commission approved a series of "Market Behavior Rules" that prohibited such practices and permitted the Commission and the public to monitor market-based energy transactions more closely. Id. at 62,142-43 (summarizing Rules). The Market Behavior Rules were not issued in the form of Commission regulations, but instead conditions imposed upon all existing and future market-based tariffs approved by the Commission. See 103 F.E.R.C. at 62,373 n.5.

Colorado Office of Consumer Counsel and others (hereinafter "Consumer Advocates") petition for review. Asserting that the Market Behavior Rules simply regulate sellers' behavior, they argue that the Commission, having found rates unjust and unreasonable, violated FPA section 206 by failing also to "fix" a new rate. Consumer Advocates go on to argue that in fixing a new rate, the Commission must reject all market-based rates. According to petitioners, certain aspects of FPA section 205, which provides the framework for the filed rate system, are fundamentally incompatible with market-based tariffs.

The Commission argues that intervening events have mooted Consumer Advocates' claim. Specifically, after the petition was filed, Congress passed the Energy Policy Act of 2005 ("EPAct"), Pub.L. No. 109-58, 119 Stat. 594 (codified in relevant part at 16 U.S.C. § 824v), which gave the Commission explicit authority to prohibit "any manipulative or deceptive device or contrivance" used in the purchase or sale of electric energy or transmission services. On our own motion, we held Consumer Advocates' petition for review in abeyance, along with five other petitions for review regarding these proceedings, while the Commission determined whether it would exercise this new authority and, in the process, revise or repeal the Market Behavior Rules. See Cinergy Mktg. & Trading, L.P. v. FERC, No. 04-1168, 2006 U.S.App. LEXIS 3682 (D.C.Cir. Feb. 15, 2005). The Commission did just that: it rescinded the Market Behavior Rules, replacing them with Commission regulations, some of which were issued under its new EPAct authority. See Investigations of Terms and Conditions of Public Utility Market-Based Rate Authorizations, 114 F.E.R.C. ¶ 61,165, at 61,528-29 (2006). The rescission of the Market...