right is miss frances francis who represents the northern california power agency the other petitioner in this case we're sharing our time in this matter and we divide the issues in the interest of the fish and say this is the mail remember cases that right and my remembering right is this the mail room ever case your honor that is the way it's been denominated but i have reservations that that's what happened but that is the same thing and  commission's orders unlawfully waive the commission's regulations and should also address the issue of whether the commission's orders unlawfully conferred a so called incumbent preference which is created by section fifteen eight to act on our view the orders that are before you would destroy the statutory limits it would create a system which is entirely discretionary prefer purport to waive the deadline that's and they had the effect by doing that of waiving the deadline if i could explain in one thousand nine hundred why why i had understood at the same way that a i five the deadline and said even though it was just an accident you can't get out of it five year notice saying we will file the application but when it came to the statutory deadline the two year but they didn't do it and first that you know congress did not think of this scenario and they called it a  they created in one thousand nine hundred nine swallow the rule here i will submit to this court that in the court the commission's current position there is no statutory deadline for anyone perpetration which has been consistent wait a minute  in the interest of justice but where its own regs are simply designed to provide for expeditious and fair proceedings is there something to the contrary of the authority that they can suspend their own  discretionary decision for said they are required by the statute what words are you referring to in order in order five thirteen which was the commission's room making your client i don't think that my client was not applying and i would like to address that issue and there was only one individual one applicant for this whole project your honor and that was p g and e who and my client and c p a was not at that point an applicant your honor there was as i said it's just a question of fact how many applications were there there was one application i would like to address the question there however of what t conditions regulations could not be more clear as to who gets to play in that second round and who does not get to play in that sack around but the regulations make very clear is that the change the regulation if it took the proper steps under the a p a and promulgated to change and you really hit it right on the nail the commission in fact decided it didn't like the result so it indeed said upon itself to go change this regulation that's very clear regulation there are two of them which the commission waived and what is a commission grew the commission took these regulations which took three years by the way your honor to promulgate under the a p a the two was to invite the world virtually to come in and compete for this license application and on the right round one which also had very elaborate rules and regulations and so forth but included a preference  it wasn't following timely procedures the commission was allow an existing licensee to keep a license for ten fifteen twenty years on a year by year re when it started to it didn't just wave was this where they can just wave the regulation is waving regulations sounds like you just sort of tweaking it here and then this commission wholesale changed the regulations that history has the at the r c ever given a new license are you all licensed in a situation where the incumbent one is a license i know what everyone else knows and we hope that we don't have jurisdiction now and what we should do is just wait for the licensing proceeding to end and then when it comes back out determine that whether p g and e should have been allowed to put in for it and whether the commission overweigh case in which anyone who competed with an incumbent ever won and that's pretty good for everybody i think your honor asked a question earlier as to the question of where were my clients in october one why didn't they show up with a competing license application by the deadline saying why didn't they i just wanted to ask whether or not they were they had the opportunity to problem application i said your honor and they had the opportunity and they didn't take it no one else did either because these applications are very expensive to pursue fiji he said spent three million dollars to pursue an application and i wouldn't recommend to a client that it pursued that it spends three million dollars for a zero chance we thought that there might be a chance and the reason why we thought there was a chance was because the commissions regulations and rounds who gave us a level playing field however  by reconstructing the rules around to ignoring its own regulations and note that it only did it in this one case only this one case had the rules been changed once  judges had mentioned that his his library was decorated with eighteen c f r s and it reminded me of that yes we have all these regulations but when they're actually called into play then the commission si was no crime and there was no punishment but the regulations provided a remedy for that and p g knew and still had agreed as allies and see the following regulations so where was the crime and where was the punishment fisa court good afternoon my name is larry gas tiger i represent the federal energy regulatory commission and with the counsel table is mr william madden representing the pacific gas and electric company i've exceeded five minutes of my time him for any questions you might have let me start off right off the bat with one statement that council made the commission has in fact waived this regulation in another instance in a case called the alms har main corporation and so it is ninety nine for paragraph sixty one thousand frankly i think this case was a situation where the commission was trying to do equity in light of the circumstances fifteen c one as the court is pointed out does not apply only to incumbent licensees as petitioners keep characterizing project proceeding in this situation had another application come in other than from p g and e and that the twenty four once does line p g and e s application would have been rejected and that other applicant would have been the only to the regulations indicating that it was intended to deal with situations in which the incumbent licensee had misled other potential applicants from filing in the commission said we don't have that situation here there's nothing to indicate  application if you have three years in which to prepare the two years which prepare the application and you're in a situation where you don't have enough time to do that if you don't go ahead and file it goes into the orphan project situation and no one else is something of a gamble i would think but it's a no one else not either you go in the worth of projects situation and you gain an extra eighteen months in which to complete the application it also may be a situation where they're actually looking to not have anybody apply for the lights so that they can get rid of the project without anybody taking it over and perhaps prejudiced them in that way i'm not sure i don't know the situation is actually come up all that i mean what you're saying now is that the rule  the purpose of the role isn't served by apply here and i'm just trying to think if there are any instances where the purpose of the role would be served by applying it well if we had no circumstances like here where we had an indication that create a waiver to allow them to participate with others where we're allowing them to compete with the others i think the petitioners have have vastly overblown the significance of the incumbent preference the d c circuit we don't know how it would work in practical application many of these cases where there have been other competing applications that have been settlements that have resolved it so that it has what whittled down to only one maybe there's very often because it's so very effective  agency's benefit to preserve the integrity of the orphan project process by not allowing incumbents to mislead other applicants in order to later compete in the orphan project argument you wanted to save time or the third party i didn't if there are no further questions i can see the remainder of my time to the interven project was licensed incorrectly the first time and they were out of it the problem was that and they didn't file and problem was the case went on appeal and the commission changed its mind and now it's in the court of ever do that there are certain reasons in the real world or not i've met up with those kind of reasons you have a project which is not a marginally which is marginally economic and you want to get rid of it if you want to sell it you want to cut a deal because you had no intention of putting together an application at all there could be other circumstances i could reveal or speculate on but i don't think they would serve any purpose here  critical thing that's the commission enunciated in one thousand nine hundred nine when it adopted these regulations was that it would preclude the existing licensee which gave notice and didn't file because that would constitute a misleading act on the part of the existing licensee that was the purpose that was the reason why the existing license the was to be excluded because it would have misled othe existing licensee who mislead after three years and three million dollars in preparing a light and sample occasion and suffering this mailroom error we didn't try to mislead anybody we just even though they could have granted the waiver because it was someone else in the door who had spent the money prepared the application and would have been substantially prejudiced and this brings this american farm lines every agency has the inherent authority to waive the full regulations if the ends of justice are required and there is no substantial prejudiced and we submit in this day's doesn't matter that an american was as they have this why would the rules were not intended primarily to confer important procedural benefits upon individuals in the face of otherwise unfettered discretion and then they say  was to punish and an applicant that did not file an applicant that misled and was not teaching any we didn't sit around figuring out a way to mislead anybody and we didn't sit around figuring out a way to be correct where the idea was while the process was to protect the employee correct exactly there was someone who would have been substantially prejudiced like in the dulux and you're saying there's no prejudice here because to the extent to those regulations are intended to benefit anybody other than the agency its sole world that is correct i would yes but let us take the situation that i'm sure congress and the commission was in visioning in the eighty six ninety nine period where another applicant came in and a stranger and filed on time that would be where did we wouldn't be here today if that happened there that's the kind of substantial prejudice i would have a problem with and we don't have that here first had that kind of a problem in other cases where there were competing applicants in the door and they said no we're not going to grant a waiver for a middling error we're not going to grant a waiver for a mis understanding the time period because there's going to be  substantial prejudice against someone who has already done their homework is to have no prejudice here because they were they had not for their mistake they wouldn't appear that is correct where strong man like an incumbent that expects to have a strong man file an application instead of itself because of some problem that has been the straw man let's see coming down so the incom that we're not going to scrutinizing that location very carefully actually thinking with liquor licenses that sort of thing happens all the time well they didn't mention liquor license problems but they did recognize a pride of administrative law structure actually ye made sure its regulations were there to preclude that from happening but that's not our situation and i don't believe either of us have gotten into that is that the kind of situation that would be mean to compliance record and i guy that knows that he shows up may be denied a license and having set up a straw man or entering into some kind of joint application arrangement they are going to be fooled by it and  made that clear in other regulations but i don't think that's our case thank you counsel thank you cited it because it stands in our mind it followed our case it did not proceed our case we believe it's a floodgate problem the statute created a deadline the regulation used permitted o exceptions but now what's happening is the commission is completely eliminating the statutory element there is no situation remaining under the first interpretation where the statute limits the not discretionary thank you thank i think your honor there is a whole traditional line of cases in which we if the regulation is clear your honor agency is honor bound to follow it otherwise we do not have a system  honor in the second round that has not been found anywhere in the regulations that's the difference there is extreme prejudice hargreaves tried to explain it we think the facts are obvious there's not been single case in which a challenge incumbent has ever lost a license