Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-09-01060/USCOURTS-caDC-09-01060-0/pdf.json

Parties Involved:
Federal Energy Regulatory Commission
Respondent
Florida Municipal Power Agency
Petitioner
Florida Power & Light Company
Intervenor for Respondent

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify the

Clerk of any formal errors in order that corrections may be made before the

bound volumes go to press. 

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 10, 2009 Decided April 16, 2010

No. 09-1060

FLORIDA MUNICIPAL POWER AGENCY,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

FLORIDA POWER & LIGHT COMPANY,

INTERVENOR

On Petition for Review of Orders 

of the Federal Energy Regulatory Commission

Robert A. Jablon argued the cause for petitioner. With him

on the briefs were Daniel I. Davidson, Peter J. Hopkins, and

Rebecca J. Baldwin.

Holly E. Cafer, Attorney, Federal Energy Regulatory

Commission, argued the cause for respondent. With her on the

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brief were Cynthia A. Marlette, General Counsel, and Robert H.

Solomon, Solicitor.

Clifford (Mike) Naeve argued the cause for intervenor.

With him on the brief were Kathryn Kavanagh Baran and

Stephen L. Huntoon.

Before: ROGERS and GRIFFITH, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The Florida Municipal Power

Agency (“Florida Municipal”) petitions for review of two orders

of the Federal Energy Regulatory Commission (“FERC”)

regarding the rate base for network transmission service using

the facilities of Florida Power & Light Company (“Florida

Power”). Florida Municipal resists the conclusion that the

comparability principle, under which FERC applies the same

integration standard to Florida Municipal and Florida Power in

determining whether their facilities provide any benefit to

Florida Power’s transmission system, bars the relief Florida

Municipal seeks. In regard to FERC’s approval of Florida

Power’s April 2005 compliance filing, Florida Municipal first

challenges the sufficiency of the evidence supporting the finding

that the test Florida Power used in 2005 on its facilities to

identify “unneeded redundancy” was comparable to the test

Florida Power used in 1994 to evaluate Florida Municipal’s

Vero Beach–to–Fort Pierce facilities. Second, Florida

Municipal contends its facilities were required to be treated no

differently than Florida Power’s local facilities, so that Florida

Power’s rate base must exclude the costs associated with Florida

Power’s local facilities. We deny the petition.

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1

 See also Promoting Wholesale Competition Through Open

Access Non-Discriminatory Transmission Servs. by Pub. Utils.;

Recovery of Stranded Costs by Pub. Utils. & Transmitting Utils., 61

Fed. Reg. 21,540, 21,630 (May 10, 1996) (“Order No. 888”), on

reh’g, 62 Fed. Reg. 12,274, 12,330 (Mar. 14, 1997) (“Order No.

888-A”), on reh’g, 62 Fed. Reg. 64,688 (Dec. 9, 1997), on reh’g, 82

FERC ¶ 61,046 (Jan. 20, 1998), aff’d, Transmission Access Policy

Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom.

New York v. FERC, 535 U.S. 1 (2002); Fla. Mun. Power Agency v.

Fla. Power & Light Co., 67 FERC ¶ 61,167, at 61,477-78, 61,481

(May 11, 1994) (“FMPA I”), reh’g granted in part, 74 FERC ¶ 61,006

(Jan. 5, 1996) (“FMPA II”), reh’g denied, 96 FERC ¶ 61,130 (July 26,

2001) (“FMPA III”), aff’d sub nom. Fla. Mun. Power Agency v.

FERC, 315 F.3d 362 (D.C. Cir. 2003) (“Florida Municipal I”).

I.

The background to these proceedings appears in Florida

Municipal Power Agency v. FERC, 411 F.3d 287, 288–91 (D.C.

Cir. 2005) (“Florida Municipal II”). Florida Municipal obtained

access to Florida Power’s network transmission system but did

not receive pricing credits for using its own transmission

facilities if they were “interconnected” rather than “integrated”

with Florida Power’s transmission system. See Fla. Mun. Power

Agency v. FERC, 315 F.3d 362, 364–68 (D.C. Cir. 2003)

(“Florida Municipal I”).1 In denying credits, FERC explained

that it had “not direct[ed] a merging of the parties’ transmission

systems or the operation of a joint transmission network.” Fla.

Mun. Power Agency v. Fla. Power & Light Co., 74 FERC

¶ 61,006, 61,009 (1996) (“FMPA II”). In affirming that denial,

the court described FERC’s pricing system as allocating the

price of network transmission services based on the ratio of each

network customer’s load to the total load on the transmission

system. Fla. Mun. I, 315 F.3d at 363. In addition, the court

described FERC’s “principle of ‘comparability,’” in which “the

same integration standard that applies to transmission customers

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for the purpose of determining eligibility for pricing credits[,]

also applies to transmission providers for rate determination

purposes.” Id. at 364.

On January 25, 2005, FERC agreed with Florida Power that

to be considered “integrated” into its transmission system, a

facility would need to pass a four-factor test, with one factor

being “a facility that provides only unneeded redundancy is not

eligible for cost recovery.” Fla. Power & Light Co., 110 FERC

¶ 61,058 at P 13 (2005) (“January 2005 Order”). FERC

determined Florida Power had not applied this factor to its

facilities in the same way it applied the factor to Florida

Municipal’s facilities, and Florida Power needed to show that

“each facility included in its transmission rate base was needed

to deliver power to customers in the area where the facility is

located and to other [Florida Power] load centers.” Id.

(emphasis added).

In April 2005, Florida Power submitted a compliance filing

proposing to remove approximately $29 million in costs from its

network transmission service rate. FERC concluded it was

unclear whether Florida Power had failed to test its non-radial

(i.e., looped) facilities in a manner comparable to the way it

tested Florida Municipal’s facilities. See Fla. Power & Light

Co., 113 FERC ¶ 61,263 at P 20 (2005) (“December 2005

Order”). Specifically, Florida Power had not indicated whether

“unserved load” resulting from tests of its facilities referred to

“load that is directly connected to or supplied by” the facility

being tested “and/or load in other [Florida Power] load centers.”

Id. at P 23. So FERC accepted Florida Power’s compliance

filing in part but stated that the test Florida Power had applied

to its facilities should have been whether, even without the

facility being tested, Florida Power is able to deliver power to its

customers in the facility’s area “and to other [Florida Power]

load centers.” Id. at P 21. Florida Power requested rehearing on

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the ground that through this use of the word “and” FERC had

shifted the comparability standard from that previously used in

evaluating the 1994 tests of Florida Municipal’s facilities’

eligibility for pricing credits. FERC denied the request as

untimely. See Fla. Power & Light Co., 116 FERC ¶ 61,013 at

P 17 (2006) (“July 2006 Order”). Florida Power sought

rehearing and reconsideration.

By order of February 21, 2008, FERC reconsidered its

denial of rehearing. Fla. Power & Light Co., 122 FERC

¶ 61,159 (2008) (“2008 Recons. Order”). FERC acknowledged

that it had “erred” in its interpretation of the 1994 test applied to

Florida Municipal’s Vero Beach–to–Fort Pierce facilities, and

concluded that the test Florida Power applied to its facilities to

determine whether they provide “unneeded redundancies” was

comparable to the 1994 test. Id. at P 9–10. In support of this

change in position, FERC relied on the affidavits of two experts,

Karabet Adjemian and Hector Sanchez, submitted by Florida

Power. FERC accepted Florida Power’s April 2005 compliance

filing. One Commissioner dissented on the ground the majority

had not adequately explained its reversal of previous findings on

comparability and Florida Municipal had raised “serious

concerns” about the speculativeness of the Adjemian and

Sanchez affidavits. 2008 Recons. Order, Dissenting Statement

2–3.

FERC denied Florida Municipal’s request for rehearing,

reiterating that in its January and December 2005 Orders it had

“misinterpreted” Adjemian’s 1994 affidavit and thus misstated

the test for integration. Fla. Power & Light Co., 125 FERC

¶ 61,344 at P 7, P 20 (2008) (“2008 Order Den. Reh’g”). FERC

affirmed its determination that the Florida Municipal facilities

were “unneeded” because they were not necessary to serve

either Florida Power’s local or remote load, and that Florida

Power’s similarly “unneeded” facilities were properly

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eliminated from its transmission rate base. Id. at P 21.

Weighing the evidence, FERC concluded Sanchez’s affidavit

describing his testing of Florida Power’s facilities in 2005

showed he used models and methodologies consistent with

Adjemian’s 1994 testing of Florida Municipal’s facilities. In

contrast, Florida Municipal’s expert evidence purporting to

recreate the 1994 test was unpersuasive because it failed to

follow the methodology employed in Adjemian’s 1994 test.

Ruling that Florida Municipal’s objections to the adequacy of

Adjemian’s 1994 affidavit were brought too late, because FERC

had relied on it in the January 2005 Order, FERC also rejected

Florida Municipal’s suggestion that an adverse inference should

be drawn from Florida Power’s failure to produce a copy of the

1994 test, observing that Florida Power had produced substantial

evidence supporting its position “from a record that stretches

back to 1994.” 2008 Order Den. Reh’g at P 32. One

Commissioner dissented on the ground that the record evidence

did not justify the 2008 Reconsideration Order. 

Florida Municipal petitions for review of the 2008

Reconsideration Order and the 2008 Order Denying Rehearing.

The court “review[s] FERC’s orders under the arbitrary and

capricious standard and uphold[s] [FERC]’s factual findings if

supported by substantial evidence” in the record. Fla. Mun. II,

411 F.3d at 291; 5 U.S.C. § 706(2)(A).

II.

Florida Municipal contends the challenged orders are not

supported by substantial evidence and violate the principle of

comparability between transmission provider–owned

transmission and transmission customer–owned transmission.

As to the former, Florida Municipal objects to FERC’s revised

interpretation of Florida Power’s expert evidence on its test of

Florida Municipal’s facilities in 1994. It notes that Adjemian,

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who conducted the 1994 test, does not remember how the test

was done and produced no documentation of the test, and that

Sanchez, who conducted the 2005 test, was not sure which

testing model and method Adjemian used in 1994. It asserts

Adjemian and Sanchez provided conflicting affidavits on the

comparability of the 1994 and 2005 tests. For instance,

Adjemian’s 1994 affidavit at 54 referred to testing whether

Florida Power could deliver power “even without [Florida

Municipal’s] line,” while Sanchez’s 2005 affidavit at 7 referred

to testing “each [Florida Power] transmission facility” and

described Adjemian as having “removed the Fort Pierce–Vero

Beach line.” Florida Municipal maintains the evidence of the

comparability of the 1994 and 2005 tests is therefore speculative

and conjectural. 

“[A]n agency changing its course must supply a reasoned

analysis indicating that prior policies and standards are being

deliberately changed, not casually ignored.” Greater Boston

Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970).

Where FERC “carefully explained its reasoning . . . . [t]he fact

that FERC changed its approach required no additional or special

explanation.” Westar Energy, Inc. v. FERC, 568 F.3d 985, 989

(D.C. Cir. 2009). To provide a reasoned analysis, FERC must

first establish that its finding of testing comparability is

supported by substantial evidence in the record. We conclude it

has.

First, Adjemian’s 1994 affidavit stated that Florida

Municipal’s Vero Beach–to–Fort Pierce electric facilities are

interconnected with the Florida Power system and with each

other but that, other than the Florida Municipal line connecting

Vero Beach and Fort Pierce, the Florida Municipal facilities

internal to each city deliver power to or from Florida Power (and

where applicable from local generation). From Florida Power’s

perspective, he explained, Florida Municipal’s Vero

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Beach–to–Fort Pierce line does not change the fact that Vero

Beach and Fort Pierce each interconnect directly at Florida Power

delivery points and that internal city facilities do not reduce

Florida Power’s costs in providing transmission service.

Observing that even if one could assume Florida Municipal’s

facilities and Florida Power’s transmission system are part of an

integrated transmission grid, the question would remain whether

Florida Municipal’s facilities in any way benefit Florida Power,

i.e., reduce Florida Power’s costs. To answer this question,

Adjemian stated he applied two tests: (1) whether the Florida

Municipal facilities reduce Florida Power’s costs in providing

transmission to Florida Municipal’s cities, and (2) whether the

cities’ facilities reduce Florida Power’s costs in serving Florida

Power’s other customers. Adjemian concluded “[t]he answer to

both questions is ‘no.’” 1994 Adjemian Aff. 53 (emphasis

added). He further explained that although “a negligible amount

of power can flow over the [Vero Beach–to–Fort Pierce] line,”

this fact is not “determinative of whether the line benefits

[Florida Power]” because “[t]he question is whether [Florida

Power] has sufficient transmission facilities in the area such that,

even without the line, [Florida Power] is able to deliver power to

retail customers in that area and to transmit power to [Florida

Power]’s other load centers in South Florida.” Id. at 54. FERC

had previously focused on this sentence but failed to read it in the

context of Adjemian’s “No” answers to both questions about

whether the Florida Municipal facilities benefit Florida Power.

Second, Adjemian additionally explained that for cities

interconnected to Florida Power’s system at a single point, the

facilities Florida Power needed to transmit power to and from

each city do not depend on each city’s internal facilities. For

cities like Vero Beach and Fort Pierce that are connected by their

own power line (i.e., a loop), he had tested Florida Power’s

system with and without the line and found that the line did not

benefit Florida Power because it did not allow Florida Power to

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defer or cancel facilities included in its current ten-year

transmission expansion plan. “Indeed,” Adjemian opined,

“Florida Power would have not built this line to provide reliable

service to Vero Beach and/or Fort Pierce.” Id. at 54. Adjemian’s

2005 affidavit was to the same effect, repeating that because

Florida Power could meet all of its service obligations without

Florida Municipal’s Fort Pierce–Vero Beach line, the line

“provided no benefit to the [Florida Power] transmission system.”

2005 Adjemian Aff. 3.

Third, Sanchez’s 2005 affidavit described how his 2005 test

of Florida Power’s facilities applied the same model and

methodology that Adjemian had used to test Florida Municipal’s

facilities in 1994. Reading the January 2005 Order that Florida

Power apply to its facilities “the system modeled by [Florida

Power] to analyze the integration of [Florida Municipal]’s Fort

Pierce–Vero Beach line,” January 2005 Order at P 12, to refer to

Adjemian’s 1994 testing, Sanchez stated he believed Adjemian

had used a load flow model compiled by the Florida Electric

Power Coordinating Group (“FCG”) to analyze whether Florida

Municipal was entitled to credits for the costs of the Fort

Pierce–Vero Beach line. He explained this “load flow model

provides a snapshot of the system at the time of peak load, and

consists of data that includes the Florida companies’ respective

forecasted loads, generation, expansion plans, and long-term firm

wholesale obligations.” 2005 Sanchez Aff. 3. Sanchez gave

three reasons for his “belie[f] Mr. Adjemian used the 1994

vintage FCG load flow model to analyze the Fort Pierce–Vero

Beach line.” Id. First, that model was officially made available

in May or June 1994 and was thus the most recent model

available to Adjemian when he conducted the 1994 test. Second,

Adjemian had explained that the Fort Pierce–Vero Beach line had

been a 69 kV line and was not included in the FCG model until

the line was upgraded to 138 kV. See 1994 Adjemian Aff. 51.

Third, “Florida Power’s records indicate that the 138 kV line was

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not placed into service until 1994; therefore, a model year of

1994 would need to have been used to test that line.” 2005

Sanchez Aff. 4. Sanchez concluded it was reasonable to use the

1994 FCG model to test the Florida Power system in 2005: The

2005 test was consistent with the methodology Florida Power

used in 1994 to test Florida Municipal’s Fort Pierce–Vero Beach

138kV line because, like Adjemian removing that line from the

model, see Adjemian Aff. 54–55, he (Sanchez) removed from the

model the transmission facility being tested and determined

whether simulating a first contingency (a sudden loss of a

transmission line, transformer, or generator) resulted in a

violation of the model’s reliability criteria, i.e., whether, without

that line or facility, Florida Power would be able to meet its

wholesale transmission and retail obligations.

From this evidence, FERC could reasonably conclude that

Florida Power comparably tested Florida Municipal’s facilities in

1994 and its own in 2005 to determine whether the tested

facilities were necessary for Florida Power to be able to serve

either its remote or local loads, not both. Substantial evidence in

the record “requires more than a scintilla, but can be satisfied by

something less than a preponderance of the evidence.” Fla.

Mun. I, 315 F.3d at 365–66 (quotation marks omitted). It is true

that Adjemian stated in his 1994 affidavit that he had examined

“whether [Florida Power] had sufficient transmission facilities in

the area such that, even without the [Florida Municipal] line,

[Florida Power] is able to deliver power to retail customers in that

area and to transmit power to [Florida Power]’s other load centers

in South Florida.” 2008 Recons. Order at P 12 (quoting

Adjemian 1994 Aff. 54) (emphasis in 2008 Recons. Order). But

he also stated he answered “No” to both of the questions he posed

in his redundancy analysis. Read together, his statements are

consistent with use of an “or” test in 1994. Further, Adjemian’s

and Sanchez’s 2005 affidavits clarified the salient point: could

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Florida Power serve its customers without relying on Florida

Municipal’s facilities. 

FERC explained upon reconsideration that it now recognized

Adjemian’s 1994 affidavit did not “signal that [Florida Power]

had used a two-step threshold for integration,” but rather that

Adjemian “focused on whether [Florida Power]’s facilities could

serve all loads absent [Florida Municipal]’s Vero Beach–to–Fort

Pierce facilities.” 2008 Recons. Order at P 13. That is, the 1994

test examined whether removing facilities during the test “curtails

either local or remote load, not whether it curtails both.” Id.

FERC also relied on Sanchez’s affidavit, finding the tests he and

Adjemian performed “considered the threshold question, whether

a given facility provided any benefit to [Florida Power]’s

system.” Id. at P 14 (citing Sanchez 2005 Aff. 5–7, Adjemian

2005 Aff. 3).

Contrary to Florida Municipal’s contention on appeal, the

record evidence permitted FERC reasonably to conclude that

Florida Power’s evidence was neither speculative nor conjectural.

It is true that Adjemian did not recall precisely which test he had

used in 1994, but as FERC observed, Adjemian conducted the

test and “thus was in the best position to describe the test.” 2008

Order Den. Reh’g at P 29. FERC found his 2005 affidavit

confirming the 1994 test methodology credible because it was

consistent with his 1994 affidavit. Adjemian’s affidavit,

regarding the two cost reduction questions he addressed, that

“[t]he answer to both questions is ‘no,’” 1994 Adjemian Aff. 53

(emphasis added), was properly understood, FERC now

recognized, to mean that Florida Municipal’s facilities were not

necessary for Florida Power to serve any load, either remote or

local. This interpretation of the 1994 test is supported by

Adjemian’s 2005 affidavit, by Sanchez’s 2005 affidavit

describing the 1994 model and why Adjemian logically would

have used it, and by the focus of both the 1994 and 2005 tests on

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determining any benefit to Florida Power in terms of reducing its

costs, namely whether Florida Power could provide reliable

wholesale and retail service without the tested facility. 

Because there was substantial record evidence to support

FERC’s finding that the 1994 and 2005 tests were comparable,

Florida Municipal’s assertion of a conflict between Adjemian’s

and Sanchez’s affidavits misses the mark. Merely pointing to

some contradictory evidence is insufficient because “[t]he

question [the court] must answer . . . is not whether record

evidence supports [Florida Municipal]’s version of events, but

whether it supports FERC’s.” Fla. Mun. I, 315 F.3d at 368. And

where, as here, FERC decides “between ‘disputing expert

witnesses,’” as Florida Municipal presented its own expert, the

court applies a “particularly deferential standard” of review. Id.

(quoting Wis. Valley Improvement Co. v. FERC, 236 F.3d 738,

746 (D.C. Cir. 2001)). The fact that Florida Power did not

produce additional documentation of the 1994 test does not, as

Florida Municipal suggests and FERC rejected on rehearing,

require an adverse inference against Florida Power. See, e.g.,

Ala. Power Co. v. Fed. Power Comm’n, 511 F.2d 383, 391 &

n.14 (D.C. Cir. 1974); Int’l Union, UAW v. NLRB, 459 F.2d 1329,

1339, 1346 (D.C. Cir. 1972). Adjemian explained in his 2005

affidavit that no hard copy or electronic files were available for

the 1994 tests because the results were only blank screens

indicating that the tested Florida Municipal facilities did not

benefit Florida Power. Florida Municipal’s reliance on Shepherd

v. American Broadcasting Cos., 62 F.3d 1469 (D.C. Cir. 1995),

is misplaced, because the court there explained that the inference

applies only when a party “consciously disregarded its

obligation” to preserve documentation, id. at 1481, and Florida

Municipal offers no such evidence.

Florida Municipal maintains that Florida Power’s 2005 test

of its transmission facilities was incapable of measuring whether

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those facilities were necessary to serve remote, rather than local,

customers. Pointing to an affidavit of Joseph Linxwiler in its

October 2006 protest of Florida Power’s September 2006

compliance filing (responding to the July 2006 Order), Florida

Municipal describes Florida Power’s testing of its lines as a test

of line segments, in which, by definition, adjacent segments

would be necessary to deliver power to each other unless a

segment had an independent power source. But FERC explained

that Linxwiler had incorrectly focused on how Florida Power

should have performed an “and” test on its facilities in 2005 (to

test whether a “facility’s absence curtained both local and remote

loads,” 2008 Order Den. Reh’g at P 23), when FERC had

determined that in 1994 Florida Power had instead performed an

“or” test on Florida Municipal’s facilities (to test whether a

“facility’s absence curtailed either local load or remote load,”

2008 Order Den. Reh’g at P 23). 2008 Order Den. Reh’g at P 35.

In this situation, FERC observed, what is relevant is not whether

segments or lines were tested, but instead that “both Florida

Power’s and Florida Municipal’s facilities were comparably

tested by eliminating loop flow.” Id.

To the extent Florida Municipal maintains FERC has not

justified its change in position to allow transmission that benefits

only a local area to be included in a rate base, FERC explained in

the challenged orders both the nature of its error and the

evidentiary basis for its revised interpretation of Adjemian’s 1994

affidavit. Combined with the fact that the “or” standard was the

standard FERC had been applying in these proceedings, as

Florida Power pointed out in seeking rehearing of the December

2005 Order, FERC’s explanation was sufficient. See Motor

Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.

29, 42 (1983).

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III.

Florida Municipal also contends, even if the 1994 and 2005

tests were comparable, that FERC nonetheless violated the

comparability principle in view of the requirement of the Federal

Power Act that rates or charges for electric energy transmission

or sale be just and reasonable and not unduly preferential or

discriminatory, see 16 U.S.C. §§ 824d–824e. Florida Municipal

objects to paying rates based on costs of Florida Power facilities

that transmit power only to its local customers when Florida

Municipal does not receive rate credits for its facilities that

transmit power only to its local customers. Florida Municipal

views its transmission facilities as “functionally” equivalent to

those of Florida Power and thus deserving of comparable

treatment. Pet’r Br. 42.

Comparability as defined by FERC is not a test of functional

equivalence, but instead a test of whether a facility benefits the

transmission provider’s network transmission system. See Fla.

Mun. I, 315 F.3d at 366–67. As FERC has stated, comparability

requires only that Florida Power exclude from its rate base or

provide credits for those facilities not needed by Florida Power

to provide transmission service to its customers, whether those

customers are served by local load or remote load. 2008 Order

Den. Reh’g at P 24. Florida Municipal’s claim that it must

receive credits or rate base reductions for its local facilities thus

appears to reflect “a fundamental misunderstanding,” Resp’t Br.

35, of the 1994 and 2005 tests and Florida Power’s status as the

network transmission provider. 

In Florida Municipal I, 315 F.3d at 364, the court quoted

Order No. 888, 61 Fed. Reg. at 21,603 (emphasis in original):

“The fact that a transmission customer’s facilities may be

interconnected with a transmission provider’s system does not

prove that the two systems comprise an integrated whole such

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that the transmission provider is able to provide transmission

service to itself or other transmission customers over those

facilities—a key requirement of integration.” FERC has been

applying this integration standard here. See, e.g., FMPA III,

supra note 1, at 61,545. Thus comparability required that “if a

transmission provider includes a facility in its rate base, then its

transmission customers may receive rate credits for any similarly

situated facilities.” Fla. Mun. I, 315 F.3d at 364. Florida

Municipal incorrectly interprets “similarly situated” as

“equivalent” without taking into account whether a facility is

“integrated” into the provider’s transmission network. FERC’s

distinction between network transmission providers and

customers allows Florida Power to include in its rate base its

facilities that are needed to serve its customers, but does not

allow Florida Municipal to receive credit for facilities it needs

(and Florida Power does not need) to serve Florida Municipal’s

customers. Cf. Fla. Mun. I, 315 F.3d at 367–68.

Florida Municipal’s claim of undue discrimination fails in

view of the substantial record evidence that Florida Power

applied comparable tests to both its facilities in 2005 and Florida

Municipal’s facilities in 1994. The 1994 test examined whether

Florida Municipal’s facilities are useful to Florida Power to serve

Florida Power’s customers (including Florida Municipal), not

whether Florida Municipal’s facilities are useful to Florida

Municipal to serve its customers. The 1994 test of Florida

Municipal’s facilities was comparable to the 2005 test of Florida

Power’s facilities because both were integration tests to

determine whether a facility provided a benefit to the

transmission provider, Florida Power. A reduction to Florida

Power’s rate base would be required only if a Florida Power

facility provides “unneeded redundancy” rather than a benefit to

Florida Power; because Florida Power’s April 2005 compliance

filing met FERC’s criteria by removing from its rate base those

facilities that did not serve either remote or local load for Florida

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Power, see December 2005 Order at P 6; 2008 Order Den. Reh’g

at P 24, nothing more was required. 

 To the extent Florida Municipal maintains Florida Power’s

rate, based on the 1994 and 2005 tests, is not just and reasonable

because Florida Power’s facilities that serve its local loads are not

used in providing service to Florida Municipal, Florida Municipal

is collaterally attacking the FERC orders affirmed in Florida

Municipal I, 315 F.3d 362, as well as Order No. 888 affirmed by

this court in Transmission Access Policy Study Group v. FERC,

225 F.3d 667 (D.C. Cir. 2002), and by the Supreme Court in New

York v. FERC, 535 U.S. 1 (2002). 

Neither can Florida Municipal show that FERC improperly

rejected evidence that Florida Municipal’s facilities qualify for

pricing credits. Florida Municipal points to evidence that its

expert, Robert Williams, tested its Fort Pierce–Vero Beach

facilities using Florida Power’s 2005 test and determined that

these facilities provide more than “unneeded redundancy” and

thus should qualify for pricing credits denied in Florida

Municipal I, 315 F.3d 362. This proceeding is not an opportunity

for Florida Municipal to relitigate the eligibility of facilities for

pricing credits; that issue was settled by FERC and its denial of

pricing credits was affirmed by this court in Florida Municipal I.

Furthermore, FERC explained why it was unpersuaded

Williams’s test resembled Adjemian’s 1994 test. Adjemian’s

1994 test used a “single contingency” test while Williams’s test

used a “multiple-contingency scenario.” FERC concluded the

latter required an “unreasonable” assumption that Florida Power

would deliver more than the peak load for which it is responsible.

How Florida Municipal’s “single line contingencies” testing was

comparable to the 1994 test was not explained. 2008 Order Den.

Reh’g at P 34. Although Florida Municipal now claims FERC’s

understanding of the Williams test “makes no sense,” Petr.’s Br.

32, Florida Municipal does not dispute the absence of an

USCA Case #09-1060 Document #1240254 Filed: 04/16/2010 Page 16 of 17
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explanation before FERC of how Williams’s use of “single line

contingencies” was comparable to Florida Power’s tests. Having

found significant deviations between Adjemian’s description of

his 1994 test, see 2008 Recons. Order at n.24, and Williams’s

description of his test, see 2008 Order Den. Reh’g at P 33, FERC

reasonably rejected the Williams test evidence because it applied

a model and method that were “different (and stricter) than the

tests conducted by Florida Power,” id. at P 34. And while Florida

Municipal questions why Florida Power did not retest the Fort

Pierce–Vero Beach line in 2005, Florida Power’s expert stated

he performed the tests of Florida Municipal’s facilities that

Adjemian had performed in 1994 and the tests again showed that

Florida Municipal’s facilities provided only unneeded

redundancy for Florida Power. See 2005 Sanchez Aff. 2–5.

FERC’s reasoned explanation and weighing of the evidence,

particularly between disputing expert witnesses, is entitled to

deference. Fla. Mun. I, 315 F.3d at 368. 

Accordingly, we deny the petition.

USCA Case #09-1060 Document #1240254 Filed: 04/16/2010 Page 17 of 17