may please the court i'm kevin mckeown counsel for the california attorney general and for the california parties i understand i'm supposed to keep my own time but my intent is to reserve five minutes for  we're here today because for fail to comply with this court's mandate and lockyer this court told for on remained go back and look at the actual market based rates that sellers charged california during the energy crisis but that they failed to report to ferkin the required quarterly reports and determine whether those rates were just and reasonable and if they were not just unreasonable consider whether you should grant refunds for access that it complied it did not this court said ferg may not rely solely on its preliminary market power screen to determine whether market based rates are just and reasonable on remand ferk said first may rely solely on its preliminary market power screen to determine whether market based rates are just and reasonable so long as it rerun the same screen after the sale and the seller passes the screen this court said firk must look at the actual rates charged to gauge whether the rates were just in reasonable and that markets were not subject manipulation on remand first said there's no need to look at the actual rates charged and we're certainly not going to permit evidence on market manipulation this court said first may not treat failure to file transaction reports as a technical compliance issue because compliance transaction reports are essential integral crucial to the market base rate system and that pragmatically without them there is no place at all on remand firk said even assuming the california parties were correct that every single seller failed to file compliant quarterly reports that fact is irrelevant if the sell passes the screen when we rerun it so for sales during the crisis failure to file compliant quarterly reports was and remains a technical compliance issue notwithstanding this court's mandate done on remand is not compliance with the mandate it is thinly veiled defiance of the mandate and it fails to satisfy the requirements of the federal power act and of reason decision making now  will say it does in fact look at the actual rates charged and then what it looks at those rates it looks for indicia of market power and if it finds an dish of market power it holds a hearing to determine whether there was actually market power and at the hearing however there is no need to bother looking at the actual rates charged to decide whether those actual rates were just and reasonable for just reruns the preliminary screen and if the sell passes for it is entitle to presume that the rights that were actually charged were just and reasonable so according to for the only purpose of knowing the actual rates charged is to decide whether to rerun the preliminary screen to see if the anti competitive market outcomes that in this case everybody knows actually occurred were theoretically possible what fergus describing is a fantasy world in which what actually happens is ignored because it differs from what the screen says ought to happen it's like refusing to believe that it's raining even though you feel raindrops on your fingers because the forecast was for sunny skies it's like refusing to believe that the driver was speeding because he passed his driving test before he got his license and they administered the driving test after he was caught speeding the court understood and said in the opinion that the rates during the crisis were not just and reasonable and fact the court was repeating what first had said in its own opinions the court said rates during the crisis were not just unreasonable in part to market manipulation the court said most if not all sellers had failed to file compliant quarterly reports and again most of these things that the court was saying in its opinion were things that first upset the court also said that rates during the crisis  were out of control even though everybody knew that every seller who was charging these rates had already passed the preliminary screen the court also likely understood and first surely understood that there wasn't any seller and certainly none of the power marketers who were left in this case who would have failed the preliminary screen if it was rerun as of the time the seller made the sales to california or the that or the sales at issue here so when this court remanded the first there was little doubt the first was supposed to do it was supposed to see if sellers had failed to file compliant quarterly reports it was supposed to determine whether the actual rates charged that should have been reported in those reports were just and reasonable and it was supposed to consider refunds and although the california parties in two thousand and four asked the court to order for the order refunds the court decided to defer to further in the first instance to decide that issue so given the context what did on remand here is not only inconsistent with the court's mandate it is obviously wrong and it's inconsistent with any notion of reasoned decision making for three reasons first the preliminary screen is completely useless for what this court court called step two the essence of the lock your opinion analyzing the actual rates that are charged and whether they were just and reasonable and it it's useless because it doesn't tell what actually happened in the market whenever it's run it only forecasts what ought to happen in the market it's just like redoing the driver's test can't tell whether the driver was speeding it's just not designed for that purpose the quarterly reports if filled out correctly reveal what actually happened so all you need to do is contrast the information examined in the preliminary screen with what's reported in the quarterly report to see that they are different tools that use different information for different purposes the screen looks only uncommitted generation capacity owned or controlled and it assumes that if it's less than twenty percent of the available generation in the entire market the seller cannot exercise market power that's the assumption behind the screen the quarterly report on the other hand looks at the details of actual transactions fire price quantity delivery point product date there's no overlap between the two pods of information we have a venn diagram in our opening brief at page thirty eight t illustrates this point they're completely different sets of information this court understood that in lockyer and this court said it's nice that we did this preliminary screen but what's essential is that you look at the actual rates charged those are the things that are in the quarterly reports and that's what you fork didn't do so we're sending it back and forth still hasn't done it second what folks says it does with the quarterly reports that is just simply look at them to see whether there are of market power and then if there are it goes in reruns the screen well it never does that it's never done that it has made it up for this case to deny it's relief it's just not the way for practices done and in that case what furka done was look at the actual rates charged in the market it decided in the november two thousand order that you quoted in your lock your opinion that the rates were probably unjust and on reasonable and they were go have to be further and alice's and there might be refunds but there was no mention of rerunning this screen to make that determination it just wouldn't have occurred to anybody because that's not what  price and but there was never a mention in any aspect of that case that the idea was to rerun the preliminary screen to see whether sellers had market power now we got actual evidence of market manipulation and other things that indicated market power first was not interested in nor did it look at me and we run the screen from the part disconnect you argue between what the market power and the market share test and not having it can grooms and also between how one might determine whether something is unjust in a reasonable but that you need certain evidence certain evidence ought to be admissible in order to make that calculation such as market manipulation details so we have a lot of things kind of floating around and your argument is that for didn't follow our mandate which we'll have to figure out so let's just imagine they'd that for did not follow and if that's true then apparently worked clear so what in your view is the procedure in a kind of a cookbook form that for it to follow were it to follow the mandate as you interpret it you're out or what ought to happen i think is that  if it's what first would do if we got a complaint against existing rates it would it would look at the complaint it would then look at the rates and it would make a determination as to whether the actual rates charged appeared to be  reflecting something other than a competitive outcome in the market there are various tests that can be used to do it but all of the tests that would be used to do it have information in them of the type that's in the quarterly reports because that's the information that you need to look at to see whether actual if you appropriately look at the quarterly reports then you can divine in some cases market manipulation and other various anomalies and yes your honor anomalies in the market yes you can see for example price discrimination right because it because the you know obviously there were proceedings below on different sides argued how they thought forgotten might maybe you know in their briefs how this was going to happen but now we're at a new stage and we there are far more we would have other options if it were to go back what what is your characterization then on how for needs to use the quarterly report in well your honor i think that the primary thing that first should do consistent with this court's opinion and lockyer is to go back and find out the step was clearly which sellers failed to file compliant quarterly reports but i think what this court said in law number one that's number one and i think they can almost stop there because once they have that information i think what this court's lockyer decision says is that by definition means that the rate charged was unlawful it doesn't mean that there's going to be a refund it means that the rate charged was unlawful because the sell didn't complete the second step of the process by filing the report as it was required to do and so first would then decide whether the rate that was charged was just and reasonable that also doesn't mean that there's going to be a refund it's going to make that decision now what we know is that in this period rates were adjusted in a reasonable in many ways for many time periods and for many sellers again what focused on the let me just interject one potential intermediate step and get your comment on that and i'm sure we'll also hear from first but that is you suggest that you really could stop right there if you identify the and titties  reports but let's just say you identify them then and let's say that for disagrees that you can't just stop there you have to be able to to determine you know whether reports as wooden filed would have had with it there would be market in them a lease so then what is for exposed to do if it were to go it wouldn't just stop at step one as you would like it to do what would be number one and number two the rates charged run just on reasonable and here's how we determined that the rates charged were unjust and on reasonable we took the information for the kind of information that should have been the quarterly reports and we did an analysis of it and among the analyses are to develop a competitive benchmark that you would expect to see a price in a competitive market of the type that was in california at the time and compare that to the price that was actually charged that's one way to do it another way to do it is to look in the quarterly reports of information that should have been there and determine sell or margins what you would see if you did that was that seller margins were unbelievably outrageous now is is he the gap and in simple terms that's that's missing here is if you do one you're not doing the exactly it's like it's like the preliminary screening is really like the driver's test and the quarterly report is really like what actually happened when the driver got on the primary proposition if you if you go one way that  which is that focus completely ignored reality here because it is already found that rates during large subsets of this period that we call the lockyer period were unjust and on reasonable and it's ordered refunds so it's not every so so it has reached a conclusion in this case that it says it is entitle to presume that the rates were just in reasonable even though those very same rates charged by those very same sellers it has determined to be unjust and on reasonable in another case it's it's irrational what they've done they've they've just mixed apples and oranges and failed to follow this court's mandate which brings me to our prayer for a remedy this court was deferential to first in the first instance and allowed for it to the term and whether there should be refunds in the first instance but we think at this  point it would be appropriate for the court to order for to make a determination as to which sellers fail to file a complaint quarterly reports which they have not done determine the just and reasonable rates for those sales which they have not done and order to make refunds and this court said no we're deferring to the agency on that issue we were all these things that would suggest that refunds are appropriate but that's the agency's call we're sending that shows that the rates are just an unjust and on reason but we have folks own determinations that it's made time and again in these energy crisis cases that the rates being charged around just are not reasonable and so that's not exactly what we're reviewing here is the problem could so we're going to send it back to first to reconsider whether it would or refunds and what we have now is a third time and we just don't think first deserves a third chance  and with me at counsel table is david frederick who will argue for interveners for five minutes let me just start by saying that market manipulation matters any concern about market manipulation matters has been addressed in three other fur proceedings regarding the california energy crisis the c p c proceeding the pacific northwest proceeding and the two thousand and nine complaint proceeding further has adjudicated the matter and all those proceedings the period at issue here are completely covered regarding the server's transactions and the p x and the i s o transactions all fully covered all manipulation matters are in these other proceedings the court does not need to be concerned with those one nine five six and seven two six zero five so all we're talking today about is reporting violations but what was that what was the point of the reporting but isn't isn't review of  for primarily the fall very doctrine is only satisfied if and when i argue that case is exactly what i told the court and that's what's in your lock your opinion we have to have the market screening that occurs in advance to ensure that an so that's the main reason why quarterly reports of files are not reported because the statute requires them but you have to ask yourself what is it that we expect to be obtained by reviewing those quarterly reports and as i understand what's happened here first is basically rerun it's its market power screen or market share screen and i think for itself had said in the may two thousand two warder that the reports are important for reasons broader than that i'm sure absolutely in the commission explains that the ala j explains that and the commission explains that as well in in the orders before the court here the the at the time these transactions occurred if proper curly reports had been filed and they indicated that there was a market power concerns the commission would have really run a hub and spoke analysis must like opt out right there why it limited to three running the hub and spoke analysis that it had done in advance because market market forces may not be brought to bear properly for reasons other than somebody having to bigger share sure that's absolutely right that this is only for reporting is going to be limited to rerunning the analysis that it didn't advance and i don't understand that at all that's because your honor if i may we that's because what the commission does is it looks at the quarterly reports to determine whether there  whether market forces were truly determining the price or absolutely and that's step one look no one talked about what was general to no sound like all that was done as a rerun of the hub and spoke analysis but there are other things that could deter or prevent market forces from actually determining a just and reasonable price and it appears that for close the size of all the other possibilities since one thousand nine hundred eighty that is how it was done at the commission it's no longer done that that's how it was done in advance no no paragraphs twenty and twenty nine and other places kaoru ports help the commission monitor for interest of market power here the commission already knew they were in dish of market power when it when it ordered the hearing it didn't need to go back and look at the quarter  determine should we order a hearing today to figure out whether there actually is market power that step was already completed in this proceeding or went back to the commission with that step done there was no need for the commission to look at quarterly reports to determine whether to further investigate it was already further investigating the next step that the commission had been doing for decades was if session just our present was a commission explains in paragraph twenty eight account we are one seventy two for example another analysis of the seller's market shares conduct to term whether the seller has actually gained market power and therefore can charge interest in a reasonable rate the way it works and as this court has affirmed more than once the way that the commission determines whether rates are just and reasonable for market based rate purposes is whether by ensuring that both the seller and the buyer don't have market power if you don't have market power rates are presumed to be just unreasonable resumed right does that accomplish the presumption it is it is for purposes of violation of quarterly reports it's not for purposes of manipulation and that's why the hub and spoke tests not just run there we don't blindly say oh people didn't have market power under the hub and spoke analysis and we're just closing our eyes to actual evidence of manipulation we looked at all that evidence and it relation but what what the commission does for purposes of quarterly reporting violations this specific terrify lation not other terrified lesions addressed in the other proceedings is to rerun the hub and spoke to us and if you look for example at petitioners excerpts of record five ten paragraph thirty eight which is a declaration of its witness attached to it here in quest of one twenty two f they that witness explains the effect of failing to reporting report required transaction that it was was to deprive the commission of information useful in monitoring seller's behaviors that might have prompted further investigation by the commission this was that further investigation so the commission what's this this the running the hub and spoke that is perhaps it yes because that's how the commission determines whether rates are just reasonable that's not the standard that's in effect anymore but it was the standard that was in effect from the hundred eighty s through the california energy crisis period that's not something so what means that but are you telling me that the rage charge we're just in reasonable period no i'm telling you the ration charts were just a reasonable for quarterly reporting violation purposes the commission has found the rate i don't understand what that means when the commission looks at whether an entity has effect when as this court has a time and again and the d c circuit as well for example in montana consumer counsel at nine sixteen to seventeen this court said in mock here we agree with the d c circuit that we're not a buyer or seller has significant market power it's rational to assume the terms of the voluntary exchanges are reasonable and that's what the commission does as a base and so when we're trying to determine whether as a result of quarterly reporting violations rates were un commission reruns the hub and spoke analysis in the time that that did not it's not just relying on the original hub and spoke analysis that was run when they were granted market beat rate base rate authority or even the or the hub and spoke i don't think it's a sum mantic difference but as i understand the california parties argument they're saying in fact there's a disjunction between what you get what you can get out of the quarterly reports in this hub and spoke an and that you know has some appeal with you here and because for said that they these after they said earlier before this case that the quarterly reports after that quarterly reports provided means for spawning price trends discriminatory patterns or other in disha of the exercise of market power right and then after that all we hear is that these these reports are used for in di that doesn't talk about price trends discriminatory patterns or anything else specific so how do you account for that language changes adjust it's not a language change your hono language in prior orders for example in the enron proceeding that was where enron was coming to the commission saying you don't need to require us to file quarterly reports and the commission said yes we do first of course because of the fall great doctrine and second of all because we need to be monitoring what's going on the market to be looking for in disha reliability and make sure rates are j n r the commission didn't go on to tell the full story in that order because it wasn't necessary to end it but it but you know this is a telling part of the story in other words you're taking like some subset that's not matching between what you can divine from those reports that might make you or i think this in coming to the final decision versus taking a sort of almost categor it's because as this court and the d c circuit have affirmed rates are just and reasonable if parties don't have market power if the buyer and seller don't have market power and so that's the way the commission and the commission power it would have taken the next step to further investigate by running the hub and spoke analysis to see if any entity had gained sufficient market power market market share so that there was it so that they no longer could be presumed to have just been charging just a reasonable market base rate or you let me understand super understand we're saying are you saying that in fact here for did take the quarterly reports and what happened here was the case came back to the commission with that first part already done you you need to further investigate whether the rates are just unreasonable because there are market power concerns so why would the commission as  commission if it were to do this quarterly report analysis it would be taking a step back it already was ordering the hearing that would be ordered if it were to have looked at the quarterly reports and seen a problem the next step would have been to order hearing which is what happened here today to do an analysis on to the hub and the screening for the hub and spoke to make sure that no any entity who hadn't filed the quarterly reports properly heightened again sufficient market power that they were market power concerned so you no longer rely on that reasonable presumption what i don't understand is the apparent equivalence of just and reasonable equals nobody has too big a market share is just unreasonable only about market share the a presumption in advance but we're now talking about a retrospective review which we said is an essential part of the product everybody understands it and i think petitioners understand as well that's the end it is that's the same analysis that's done in the try and heal the every three we had with the manipulation other matters is conclusive for purposes of the quarterly reporting violations but the commission didn't stop there in this california energy crisis large her concern it looked at at very all kinds incredible reams and reams of evidence are you telling me anything other that the problem is solved over in this other case that hasn't made it to us yet the manipulation part of the concern is fully addressed in all of those other the what role did the quarterly reports play in the region at the time of this proceeding your honor the commission of the court had not at the time of law here the court had not yet ruled in c p u c and had not sent back anything for manipulation purposes the california parties had not asked the commission to look at manipulation matters none of that had come up none of the manipulation matters were before the court or in this complaint proceeding asked to be addressed by the commission to broaden the scope that didn't happen until after the remained here and then then the c p c decision came out where the court sent the case back to the commission to look at manipulation i see them going to intervene as time to do that for this same time period as is at issue here the summer period the pre october to two thousand period and then before then the court heard the or the port of seattle proceeding and that involves the service transactions the court sent it back to the commission to address the service transactions and that's also part of the lockyer proceeding for quarterly reporting violations but the manipulation matters were complaints a few years later asking the commission to look at all service transactions for manipulation and reporting violation purposes so i guess if i hear you correctly what you're basically saying is ok we read what you said in lock here but in our view meaning for you there were intervening events and proceedings and therefore we can basically ignore the part about how the reporting requirements are going to fit in each issue raised in a complaint and or what was sent back to the commission on remand and here in this proceeding was court quarterly reporting violations where the commission uses the hub and spoke test that's that's just what happens the purpose of the quarterly now so that's that's what i'm trying to say is this case was over there i'm just trying to allay any concerns that petitioners reply brief in particular spends a lot of time talking about manipulation matters and i just want to make sure the court understands it's not before the court but you shouldn't be worried about it anyway because why isn't it before the court if the prep is supposed to review in the quarterly reports what are revealed patterns of prices that suggest manipulation but  manipulation concern the commission would have had here manipulation concern the commission would have had here not just a market share concern but manipulation concern that the commission would have had here has been addressed in the other proceedings those and how w at sixty two percent in this case we have no idea whether or not those specific allegations are addressed in the other case as we sit here today they tendered evidence they wanted t tender evidence in this case we have no idea of that evidence was before for on the other cases and well i think that i can tell you that for example in the c p c proceeding that proceeding addressed terrify me that we're left in this gap position where we're being asked now to say was there remained files well the answer is probably no because at least what was written there what didn't happen but you're saying well don't worry about that because in fact it happened in perceiving b c and the that's kind of what you're saying right that is exactly what i'm saying but what are some help was that help me out then how is it that you can just meaning can just take a case which is gone through this court with a specific remain and order and then unilaterally decide well we've already addressed this elsewhere and therefore we don't have to address it  what the commission's orders explain that the reporting violations are addressed in the reporting violation complaint that's all yes they ask you to do something you didn't do it and then you say we're doing it over here so it doesn't matter what you but what the court asked the commission to do is go back for all of this is what the the court asked the commission to do in the proceeding you asked the commission to go back market share concerns were never addressed we all the court knew was that there were problems and all the commission knew at the time was there were problems with pricing in the markets and there by the time this case by the time the complaint was filed there war there was information out that they had been manipulation in the market but the this complaint didn't mention the term an affiliation all it said was these were really the complaint was about the filed rate doctrine and they didn't file proper quarterly report between the just a reasonable rate in the rate that they paid so the commission looks and says you said let's figure out who didn't file their quarterly reports properly for purposes of affirming the summary judgment and for finding s any rates that resulted from a circumstance where nobody had too big a market share were just unreasonable and the commission had a doing that for decades and that is fine again but but given that you've acknowledged that there can be raids that aren't just unreasonable because of factors beyond market share such as the manipulation that went on is the subject of the other action i kind of lost as to why it is we're supposed to assume it must be just a reasonable because the commission said for the purposes of  servers two thousand and nine complaint which raises manipulation matters this is the only proceeding where manipulation matters were raised even though people knew already that there was the staff report about concerns about market manipulation were out there but th raised the failure to make the required quarterly reports a review of which the california parties argue would have revealed manipulation and would have revealed rates that were being set other than through the exercise of proper market forces and all without in fact the tariff in place you have to determine what the just unreasonable rate is and we get the difference of just unreasonable right the market rate were different what's what's let me simpleton let me point you to fur excerpts of records thirty five to thirty six which as complaint and in that in that on that page those pages they say quote that proceeding the c p c proceeding does not involve the same legal and factual allegations raised here i e that california wholesalers have failed to file their rates as required that's rendering the rates unlawful and subject to refund they clearly said to the commission we are raising different issues in the c p u proceeding and we are raising here they separated out from the beginning they chose how they were going to set up their complaints and they set up of the subject matter of each of their complaints and the commission addressed them syria autumn and the entire body is taking care of the commission said time and time again these are separate proceedings the commission though you said they were able to raise these issues elsewhere but the if we were if we affirm on this appeal or will they raise them elsewhere where were they well the issues you just tell me that these can be raised elsewhere they've already raised them elsewhere those are already that they've all been adjudicated at least through excuse me that they've already been adjudicated either fully by the commission and are pending right now before the court to see the series two thousand and nine complaint proceeding again in twelve seven i five six and seven two six zero five as it's just sitting waiting for the court to review its advance at petitioners request lot of these cases so yeah exactly how they interact late is not maybe as obvious to us as it is to you so this is the state of california right ok i'm sorry this is  where if if we affirm here then are you telling me that because the manipulation and other issues were brought up in other doc which have not yet been appealed or or have been yet right that already had or are out there floating around still that when all that comes to fruition and there's a final decision of the circuit or a decision not to appeal something that the results of that would in effect flow to these parties the forest today they're all the same petition i mean california is in each of the proceeding and each of the ones you're talking absolutely ok yes they're to say well i don't really need to do what you're telling me because in fact at least not in this proceeding the one that's come back on re man and you know we know we don't have to issue refunds but we're going to take a look at it but we don't have to do it now you told us because we actually have all these other places that this is being played out i think that it really comes down to the the main point here is that if the proper quarterly reports have been filed at the right time and the commission had looked at them and they indicated a problem the commission by commission would have looked at the reports commission would have seen a problem if it had it would have done exactly what it did here which is order a hearing for the hub and spoke for hobbit spoke analysis so all the commission did here was exactly what it would have done if things had been done properly back then and if a commission of in doing it that way for decades this isn't new and it commits the same procedure the commission would have done in a triangle review that that's how the commission determines whether rates are just reasonable and market base rate and you had indicated of course you said when you stood up early on that rates are just a reasonable if there's no market power right but then later in response to judge clifton i thought i had heard you say well in fact that that might not reflect completely the landscape for just in reasonable rates because there may be other anomalies so did you say both of those and how did they get reconciled i did say both of them only in that because when you have a quarterly reporting violation you are figuring out whether the rates are just reasonable for purposes of this quarterly reporting terrify aleisha it's a violation it's just one type of terrify lation commission addresses that one way the commission in the c p u see proceeding and in the other proceedings that i've mentioned this more this afternoon addresses manipulation matters differently it looks at each individual seller and it determines whether that seller manipulated and it's a term is whether that manipulation affected in the p x and i saw proceedings whether it affected the market clearing price and if it did it orders that seller to give refunds that's how that works in the service transactions those are bilateral contracts the commission look individual contract applies the morgan stanley analysis of the presumption of contract rates and again goes individual by individual to see if it if the manipulation affected the contracting price at the outset i think it's really important to keep in mind the difference between market manipulation on the one hand and market power on the other this case because of the nature of the complaint that california chose to bring is all about market power they chose not to assert anything about market manipulation you can read the complaint it is clear even though enron bankruptcy and the commission had already started to investigate manipulation california chose in march of two thousand and two when they filed this complaint not to bring allegations about market manipulation in this proceeding and so that's why when fir henri man was looking at market power that is a distinct issue and it asked the cow parties to do the market power test as you had instructed in order to comply with the tariffs to ensure that there was not market power and that market power was the cause behind the high rates california chose not to comply with for its water it did not put in the evidence for required to try and market power and it never has come up with a theory for why these quarterly reports would tell us anything that would be important to the rate structure and if we look at the facts judge clifton i think it's well i think they've offered at least two theories one is a generic the rates were not lawful because they didn't comply with the second part of the two part requirement from the market based rate approach and the second is that review of these mortality reports would have disclosed market dysfunction in some fashion that should have been pursued leading to the conclusion that the rates were not just unreasonable ok let me dispense with the second part first because if you look at the facts here prices rose and i'm just going from  case the rate started to rise in may of two thousand for the second quarter the quarterly report it would be due on july thirty one two thousand well two days later c of diego brought its complaint commission ended up doing for the same two thousand summer period by looking at whether or not those violations ever reports would have then led to manipulation based on the way the rules of the market had been set up and so as a consequence what's happened in the c p you see proceeding in this is the fir opinion that was referenced in the twenty eight day letter has gone through and identified the the proof of the of the rules that would have led to a pricing differentiation that would lead to refunds based on bat and you will have an opportunity to review whether the commission got that right or not but they still the cow party still have no theory about which that temporal sequence would lead to change in the spurs part of your question judge clifton the reason why that's incorrect is because the pricing data that is in the quarterly reports gives price and location and seller information so that the commission can determine market power at a particular point in time with respect to particular sellers in a particular location of the market the cal parties have trotted up economist after economist before the commission and they have never once made the nexus link between it deficiency in the report and a link to market power being the cause of the high prices that were service of record where the commission said it is not clear on the record developed thus far that there has been any demonstration of a nexus between a particular seller's reporting failures and any gain in market share that would have given that particular seller the potential to exercise market power so if you look at what this case is supposed to be about market power because this case cannot allow a retroactive refund that would be market why that would be in violation of section two zero six of the federal power act you hat you necessarily go to whether or not any deficiency in the report would have led to an unjust and reasonable rate and the answer is no because they've never given a factual nexus that would lead to that conclusion and in chief judge thomas in your c p c opinion for the court you instructed that the violations of the tariffs would lead to their own remedy and that is what is being done in the ca and in the puget proceeding and in the two thousand and nine california complaint proceeding and it's really important that you keep in mind that the way these cases work is the complaining party defines the scope of the proceedings and that is what gets a little gated through the regulatory process and then on appeal and i appreciate this court's desire to resolve what it can resolve about the california energy crisis in one fell say that the sellers have something to do with that but the complaining party here defines the scope of what it wants to complain about in the time period in which it brings that complaint and they are the ones who have done this in a piecemeal fashion they chose when they finally decided to ask for consolidation and they couldn't persuade the commission to do it they petition for review to this court and then didn't ask for you to act on that you have to wonder why and it's because their theory doesn't comport with ironclad blackletter administrate of law principles of the way reviewing courts are supposed to deal with administrative agencies that are charged with doing these and judge clifton i appreciate that you're looking at this and you're saying and it comes to conclusions about whether or not particular while ations gave rise to rates that were unjust and unreasonable but for purposes of market power which is what this case is about california has never made it showing about nexus because it never has put in the evidence to take away for a quick do this in this two thousand to two thousand and few period and actually do it in a way that would have given proper notice to the sellers and you can't fifteen years later just to say we're going to blow up the rules and do it all over again just because it feels good there's a administrative law principle here there are reviewing judge of court principles here that you are bound by and when the supreme the morgan stanley case said that just because there was market dysfunction doesn't mean that you can abrogate contracts it was making clear that you had to look at specific misconduct by the sellers and that's what those other proceedings are doing in excruciating detail months and months and months of hearing practices before ail jase the luminous testimony that's being generated and that it just happened has not caught up to we'll give you give you four we'll give you five minutes with five months in the cloud we gave you have your opponent some extra time first on the issue of other proceedings  the california parties have striven to get refunds for california consumers for all of the unjust and on reasonable rates that were charged from may two thousand through june two thousand and one and there are several cases in which those are being pursued and the cases overlap and it's confusing and i understand that but as mr frederick alluded to we actually asked for to consolidate these cases so that some of the evidence that obviously is relevant in all of the cases could be presented so for example so that we could take the quarterly reporting violations that  identified here in the locker case and and have the commission consider them along with other things in other cases the commission refused to do that the sellers resisted it so the main point that i want to make is what we are trying to do and have been trying to do is make consumers whole for all of these transactions and we certainly wouldn't want to duplicative remedy but what's what's very clear is that the remedy that we need in this case is not being satisfied by any of these other cases they made may possibly be in part but there are there are particular entities in this case for example allegheny and merrill lynch and commerce three plaintiffs whose counts are sitting here and these particular entities are not involved in the summer case that resulted from your c p u see remained there not involved in the puget case that resulted from your c p c remember from the from the from the puget ri man and so this it's not being made better in other cases i think you also may have heard part of our frustration which with with the way the manner in which fergus handled this because what first has done is essentially create a shell game where we try  to put in evidence in one case and they say no no no we're going to look at that evidence on another case where we try to get a remedy in a particular case and they say no no no you can only have that remedy and in the other case and then we never get the remedy so all we're asking for is to be made very important because the the lock your case covers the entire period so this case has the ability to solve the entire crisis and what with the like your opinion sellers didn't file compliant quarterly reports and none of them did the late the rates weren't lawful and if the rates weren't lawful the commission should determine what the just and reasonable rate is there's really only going to be one just and just and reasonable rate i'm not sure what counsel for means when she says we're looking at the just and reasonable rate for purposes of quarterly reporting it judge clifton asked her about aleppo's you've got somebody who did file a quarterly report but their rate because the way this market work is going to the same as everybody else's so they're they're off the hook right because they didn't they didn't fail to file the required report that's correct or ok that's so what you're really trying to say is that somebody who might be the  innocent beneficiary of market manipulation by others if they file their reports are off the hook but if they didn't file the report they're caught that's exactly right for the purposes of this case for purposes of this case and  to put a further gloss on it we have evidence most of the sellers conceded that they didn't file a complaint quote it's a why should filing their reports have such significant impact if in fact there's not a showing and  lack of nexus and i confess i'd have to look at that more carefully but they did say that that the california parties haven't haven't shown that the quarterly reporting had an impact is or oh no your honor we put in very detailed evidence in the further seem to think so it's in the further excerpts of record it's a very thin volume that you have it's mr taylor's testimony he explained in detail what fer could have done with compliant quarterly reports in the way of detecting and curing the problems in the market and that included manipulation included all of the things that we know that happened in the market had ferk actually been written had they been getting compliant reports and using them they could have gotten the to this point much earlier but the but the real point on on the remedy is that the court has the ability at this point to just simply say if the rate if that if the if report wasn't filed then the rates unlawful and if the rates on lawful forecast to determine the just and reasonable rate and that doesn't mean there's going to necessarily be say that but i can raise the question why should the filing requirement have such an impact if in fact unless we have to go back to the question of what you say there is evidence but for it doesn't seem to have rendered a judgment with regard to whether in fact the quarterly reports if properly filed and properly reviewed would have led to that kind of disclosure we don't know that do we well me i mean they should say that that's something different you've got evidence there's lots of evidence floating around there we've been told the other proceeding takes care of everything we don't know any of these things i just in your honor but i guess what i would say is that for itself from the get go in the quarterly reporting system said we need these reports because we can tell from them whether there's market manipulation we can tell from them whether there's market power we can tell from them that why we need them and you repeated that language back to them in your lock your opinion and when you send it back they just decided they were going to ignore the opinion and then i think as a matter  in the way the federal power act would work your honor but and we're willing to live with it and under these circumstances it doesn't make any difference because there isn't a single seller who who filed a complaint quarterly reports or none of these rates were properly filed and that was the language that first itself used a you quoted back to them in your opinion you know first firk said we need new it you actually heard counsel for say it we need these reports on file so that the rates will be filed well if the rates if the reports are not on file then the rates are not fi and if the rates are not filed then they're not lawful rates and if they're not lawful rates for can look and see whether they're just and reasonable and if they're not just and reasonable there should be refunds and that's our position  falling there i just want to make one small point and that is that counsel for first said that for decades when firk has thought on the basis of a quarterly report saw indicia of market power in a quarterly report and his thought that there might be market power and has investigated what they've done is rerun the screen and she said several times that they've done this for decades if you look in their brief you won't see a single cite to any case other than the opinions in this