the day with when we'll take a break after the first cases after an hour of fur and el paso and all of this very important very exciting area of the law will need a break so we will call k the we had printed out yet it was pretty well i still don't understand a lot about your loss to begin with before one thousand prosperity much till the second order they're assuming voluntariness and then it's in your rehearing petition to the second order where you refine your we don't want binding cost allocation generally to zero and much more specifically binding cost allocation for us derogated order one thousand because it's excluding beneficiaries who therefore won't have to pay that's how i saw it seemed to me in your rehearing to the second order that's where it gets narrowed to the issue before us and then as to when the definite and look are ok well if that's correct then i agree with you that the commission doesn't really ever answer that other than to say we don't have control over them but judge pillar in the south carolina case and judge cuddihy and whatever the illinois congress case those they both articulate about six different answers that prevailed in the d c circuit right they say well number one we can be incremental number two we don't have to be exact about how we allocate costs number three there's this reciprocity condition that we can use who we are confident for we think that they will end up complying it's premature if you say they don't and five maybe one day we'll use our authority under two eleven and that was enough for the d c circuit so why wouldn't that be enough still for us well where a different position or one thousand was at the time saying here's effectively there is an abuse of that in the seas or in the north west when you say they don't have to be exact enough but i take it what you mean by that is well here in our region we've got eleven in ten oh ok so it's a massive imbalance that has to be your and just moving those costs over to the jurisdiction is still required misery with the benefits provided but why are we at the sort of that was what edison in the i t c petitioner said they said it hasn't gone far than up well and the answer was essentially well wait and we'll work together it's not surprising to me that if you give me an option between paying and not pain not pain so that that's not surprising that you're saying now we know for a fact that that's happened let me ask you this if we were to agree with you on your issue one and that's if nothing else and she said we agree with justice you want what would be the remedy what precisely when we do and then precisely what would happen next causation prints and which means so are we sending you back for more discussion if we agree with you on ok so we can't do anything other than to say this isn't what further did isn't right go figure it out so then are you going to be back in this convoluted thing years keep saying we would give all this guidance what guidance are you asking us to give that would actually be helpful in getting this to move forward again assuming argue window and i'm not saying we'll rule this way that we agreed with you  the entire planning process and then it gets to the point where it has a section where it says if you lose you enroll as a c t o and you move out you choose to be c e o you don't want to do it that explains here's what happens to of those then it would be removed from selection in the regional process against the specificity helps because i have the same concerns or chains to so one i remember the second order they too had the black kill project only they specifically required them to recalculate if you don't count the non jurisdictional yes it so could you list the projects where we would find in the records where there is this beneficiary are the following their costs now are going to be loaded on to the jurisdictions ok well we can't just be clear there have been no projects actually slept that's what i thought so so then why isn't the commission's brief reference to this still being premature wonder why isn't that an appropriate observation if they have to then except that you will still be you won't have a collateral bar to an attack on these orders down the road when you keep to that point is that these orders a like respect or if you prefer we said look fergus committed to but kicking the can down the road and no one will be able to wave this in the stairs in front of us then that would provide some protection  i would assume but is that a solution i don't know and why and why is it or isn't it i don't believe i don't know necessarily that it is a legal solution because once these orders if you affirm these  question is what is the question for me doesn't mean that in the future to a pharmacy the developer has the burden of proof to assume just a reason for it and i gave you all the extra time i was on then a enforce it very carefully of the public utilities in the west connect region are required to have the same planning and cost allocation provisions in their care thus as a result of first order public utilities are required to jointly plan for the needs the transmission needs of non jurisdiction utilities that choose to participate as correlating transmission owners but then if those non tourist actually toadies decide not to pick up costs allocated to them for the portion of benefits that they receive the jurisdictional utilities giving the public service company of colorado and el paso are required to pick up the entire cost this free ridership is inconsistent with longstanding principles of just and reasonable rates understood under the federal power act and also departs from the requirements order one thousand both for in the course of a long hill the rates are only just unreasonable to the extent that the here to the cost causation points i mean once you cause somebody a free rider it's kind of hard to say oh yeah we'll let somebody be a free riders so the cost causation or cost elocution methodology were costs are allocated roughly commensurate with benefits such that there has to be some relationship between the benefits that utilities perceive in the cost of their allocated and in particular claim they've already done that they do claim so your honor but how can we order them to do something new that they say they've already done how is that helpful how does that advance the ball i think the important thing here is to include a directive that intentional fruit ridership that results from their decisions is inconsistent with cost causation they can require us in our tariffs to plan for the needs of these utilities that predispose cordoning transmission owners and then kick the can down the road but i'm sure the consumer have a better way of putting it but whatever it is why isn't it premature true the concern that we have here is if we were put in a position where we had to wait for a project to come out demonstrate that the rates are the longer just a reasonable and so shift the burden onto us but more importantly under section two a six and as the more common found of the louisiana public service commission versus fir case in two thousand and fourteen if we file a two zero six then we're going to be stuck with whatever the first product was so fertile say ok yes going forward you're going to have to change your terror so that this doesn't happen again but we're going to be stuck with that first project and the free rider shi disregard but instead is intrinsic to every just and reasonable cost allocation then that means for cannot really do what is already done here but what about the overarching problem of their limited authority over the proposed all along in our second compliance filing is one possible solution but ultimately a firm does have expertise in this area they could come up with something else they could choose to use to eleven a although we have a not asked that they do so  but you know ultimately what they could do is say what you propose the first time around where there are benefits to a coordinated transmission on or they're not picking up that cause they can't be bound to it therefore that project doesn't have mandatory binding  allocation people might still go through with it the trouble with that is that that would involve as they pointed out when the you proposed that almost all the projects and in your reach that would just essentially achieve what you first wanted which was even even among yourselves you couldn't have  who would always be project pacific your honor but you know one of the we would still have significant benefits from the fact that we're having to do this required regional planning that gets everybody together to come up with a regional plan and we have you know as we noted in our region a long history of successful regional planning so you know there's no evidence in the record that suggest that regional planning west connex will stop but what's your thought on your position is consistent with the south carolina decision of d c circuit especially parts five and seven or do you think we would have to sort of deviate from their rationale though your i think what's different here is that when the d c circuit considered the issue of non cost allocation what we're what we have proposed is only the first part yeah they you know will be required that they are allowed to space fully transmission orders but are not bound to cost allegation one thing i haven't heard either  paso or you is that essentially for reversed itself from order one thousand and therefore you didn't have the notice to comment opportunity to respond that the reciprocity condition would be such an important part of their quiver yes absolutely right is that in him would that be relieve you'd be asking for your honor if you want to rely on reciprocity we want an opportunity at the commission put on the evidence to demonstrate why it doesn't work and westnet we've provided some examples theoretically in our brief but we've not been offered the opportunity to develop that point as we're looking at you so what's your best authority at circuit level for the circuit saying just that you get that opportunity i think the seven circuit decisions in the way commerce commission cases all pointed to the fact that you know first it just thrown his hand up and said we'll hope for the best here when it comes to cost allocation we can't figure it out and what they can do with the seven circuit said is that's not enough you have to develop a record that supports your decision and there is no record that works for decision on which ok thank you your brief said they're premature in one sentence with one citation that's the sum total of your suggestion to us that they are it's a premature one sentence yes sure on that if that's what you're telling us right now i think their appeal from these orders is not legally right ok what we're are what we are saying is that their concerns are premature because this is the compliance finds an order one thousand is about the process and the commission here as its interested do with its deference reached a balance that it essentially did not want the concerns about the ultimate cost allocation to essentially at the front end torpedo the planning and consideration by this region of all beneficial projects the concerns that the jurisdiction utilities have are about the ultimate outcome but the commission has the ability down the road as a s found to address if the cost allocation does not end up in the well we're somewhere between south carolina and ultimately having a project and so i'm not i mean we are at the stage where we know surprise if people are told well you can either pay for something or get it for free which do you prefer they said oh we'll get it for free so we now know that and so doesn't that move us a little further along and how much do we you know he's saying it to a six process is a whole nother you know problem that he doesn't want to have to be mired in that that far down the road so why can't we decide now to look people don't get to get something for nothing well i am with i'm not actually sure that we are to that point yet your hon it's eighty five percent are you going to accept costs and that that utility says no thanks now i am would they say otherwise given that you aren't gonna do anything to him if they do well as i'm struggling to see  benefits from a more reliable grid they also have as judge higgins's said arrows in the quiver such as the reciprocity condition and so the d c circuit held the commission's position order one thousand which is we let's see if we can get that to continue through a combination of carrots and sticks and if it doesn't work down the road we can revisit that issue is that their argument that you've taken away all the carrots and sticks now and so this this incentive to have all this voluntary hand holding has gone away and therefore the world that we have now is going to be hey we aren't we pain and we just want to take and not get i'm not sure you've altered that status quo site yes person or area or so really the orders reviewing never gave any reassurance that you would utilize that how often do they say we will utilize to eleven aboard while the commission it again  not at this juncture as judge jean said we're a lot further down there's no basis to hope anymore and these other reassurances were never articulated to el paso reciprocity to eleven so it seems to me we're much closer where beneficiary pays controls and then you've got you've got slippage from that saying well not if ten of the beneficiaries are outside of our control and we don't want to use to eleven authority and we aren't going to mention reciprocity until this gets to be a legal problem that this circuit so all those pages really say is we think you'll be able to collaborate so again the order went out again the commission is working under the order one thousand revert i know that the utilities did not come to the commission as they could have as you suggest your honor and say hey i know you guys or commission said in order one thousand and before the d c circuit that you can later invoke to eleven a if you need to or invoke cost allocation from those utilities so the commission in order one thousand knowing that it did not have this authority instead said we're going to use an incentive based approach and i mean hope is the correct word for i mean the commission it's not just hope though it's based on predictions both based on past evidence and how the commission thinks that this process is going to work the d c circuit upheld that prediction because it's within the commission's expertise to make those sorts of genuine this problem is that i have a fair amount of experience as a lawyer and as a trial judge in how kind of settlements and agreements work and as soon as you hit as the judge and when i was a lawyer the person who was the judge would put their thumb on the scale in some way i can remember one where they said god help your client well that the settlement talks changed dramatically after the judge said they had and then we got a different judge you said i don't understand what the problem is here then they and then we were able to settle here i'm fine i'm not i don't need to do anything i think your honor that it's important to put it in a context order one thousandth part of a long continue of the commission implementing market based reforms the commission as a state in order one package of reforms for whatever reason doesn't work as they claim that it that it won't then the commission on its own initiative or on the latter initiative of a party can invoke section two or six and reconsider it or in address it but at the time the commission found it is premature and the fact remains that there still as i know it has not yet been a situation where a nontraditional utility here says i'm you know forget it even though those products benefit me i'm not go developer of the project once it goes from what we're in is the planing stage once it goes to the actual ok these are this is a project we're going to implement at once it goes to that stage the developer files a new tear to include the cost for that program at that time for actual cost recovery the project gets then the commission allocates the cost so if they get presented with a cost recovery and it's clear the commission that show utilities are benefiting from this but none are participating the commission can not because again this is just the process we are we have a process here to just simply identify products in other words the commission is trying to to move the ball down the field by getting people together to plan as a region so when it gets the point that after that region has and identify projects nothing at that stage is binding it doesn't become binding until again the developer gets a state approval and gets commission approval for the actual product so first position to us today is that if out but i think they would not lose the opportunity to say that the reassurances and the hope and the various vehicles that you're offering to provide to support these orders in fact didn't prove to have bite yes sure that's correct your honor they could come back and say if let's say down to two years from now this this process is complete and west connect and we've identified all these projects we want to get non theistic show utility participation commission and if the commission for whatever reason found that they were incorrect they could then appeal those commission orders to this court or or as judge change noted to the d c circuit as well so it's it w planning in the first instance because there's so much inner connection here that leads me to i am not really squarely asked you the question i asked counsel opposite which is if el paso issue one we ended up ruling in their favor and not on anything and i know you disagree with that but let's assume that argument is what remedy would you argue for what how would you write that opinion that finds for them few will on liability for issue one and then has to give some kind of guidance what would that mean i think your honor the the only thing that i can think of it would say is it would have to go back to the commission saying that this commission your rejection of their proposal for whatever reason was not within your reasonable discretion because it wasn't commensurate cost allocation either commission you need to consider invoking two eleven a or come up with some other formula but ultimately it's still the commission speaking through his orders that will deter simply a fact of the matter that just in reserve all terms like just unreasonable roughly commensurate cost causation are necessarily somewhat vague and it's the commission as the agency entrusted to administer the federal power act that has to in the first instance give to flush those out so for example the petitioners brought eleanor commerce commission and the the within that decision from the seventh circuit that went back to the commission to put meat on the bones to try to comply with the commission's or with the we and mean if the rule is for just gets to do that want then we will happily move on to the next case but i think we have a role here too so why i mean here they're saying you all have not fulfilled your statutory rol appropriately and so aren't we entitled to look at that and examine that is ok so explain to me why this problem of free ridership which goes wholly unaddressed by what you all have proposed paragraphs of cite or stand for the early proposition the orders that x binding cost ok she couldn't avoid everyone agrees with that yes but but the point then that they brought up in the rehearing of the second order is that what about half the utilities not bearing the costs so what i want you to do is just as precisely with paragraph references tell me the paragraph references work for responding to that that you wouldn't have in line roughly comparable cost so all i'm asking for is press the same exactitude you just give me as to where in those four hundred pages ferk said here is why half the utilities being outside will still lead to approximate cost causation strongest argument that this is just not it's not that we have authority to give no answer for that if you know the infrastructure so that priority overcomes cost causation it's not even really  and you don't want to address any of the other i realised that i said you know that i've been focusing i'm focusing on issue one others have perhaps been focusing on others is there anything else that you want to address and you don't need to it's totally finite in my view people don't have to use all their time and frankly often shouldn't ok thank you envisioning that we segue also we say look it's premature maybe not in terms of article three rightness but just in terms of sort of predictable prematurity so you're not waving anything you haven't lost anything goodbye see you later and then a project is proposed blah blah blah you file your two zero six and then they go ha ha ha you didn't promise you know you lost over here in this one thousand proceeding and let's go appeal to the d c circuit or some other circuit and so therefore they shouldn't be this kind of moving target of well if you challenge it before anything at all as happened which i think is south carolina you're stuck if you wait till there's a developer then it's too late but now it's premature and so you're sitting there not really knowing and he needs to be a clear rule to me and when it is right and credential e right and everything else when we ought to be where we are and less decide our doesn't the outcome here guide that exactly i think it does and two quick point before my time around is one of the things that they've suggested throughout this is that it's ok to ignore the  orders just three quick points before we finish this case this morning the first one is that ferg is in fact just hoping that this all works out in a hole is not a just a reasonable rate in the second compliance order  t paragraph thirty two the commission specifically just encouraged the jurisdictional utilities to work with the nontraditional relying on the hope that as they have participated in the past the participate in the future and that sort of hope is not sufficient to satisfy the cost causation principle or the commission's obligations to ensure just and reasonable rates on the federal power act but just cutting these pointers the infrastructure has got to get built and the one thing that what we would like the court to direct if this is remanded to the commission as we hope is a direction that first has to come up with a way that causation is not simply discarded we're not asking for a specific proportion are generalists as is judges on the this circuit ferk is the expert who are we in a sense to tell them how to do their job or how do you deal with that in terms of this guidance we have to give versus the fact that they're the experts is wron specifically i think the point here is that well the course of always held is that there needs to be roughly commensurate cost allocation we're not asking for a specific proportion and just a direction that cost causation is critical and