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Parties Involved:
Federal Energy Regulatory Commission
Respondent
Xcel Energy Services Inc.
Petitioner

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 5, 2007 Decided December 14, 2007 

No. 06-1174 

XCEL ENERGY SERVICES INC.,

PETITIONER

v. 

FEDERAL ENERGY REGULATORY COMMISSION, 

RESPONDENT

On Petition for Review of Orders of the 

Federal Energy Regulatory Commission 

Floyd L. Norton, IV argued the cause for petitioner. With 

him on the briefs were Heath K. Knakmuhs and William M. 

Dudley. 

Carol J. Banta, Attorney, Federal Energy Regulatory 

Commission, argued the cause for respondent. With her on 

the brief were John S. Moot, General Counsel, and Robert H. 

Solomon, Solicitor. 

Before: GARLAND and GRIFFITH, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

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WILLIAMS, Senior Circuit Judge: Section 205 of the 

Federal Power Act, 16 U.S.C. § 824d, and FERC regulations, 

18 C.F.R. § 35.3, require that utilities provide 60 days prior 

notice to the Federal Regulatory Energy Commission before a 

rate takes effect. FERC may waive that requirement, 

however, “for good cause shown.” Id. at § 35.11. Xcel 

Energy Services, Inc. challenges FERC’s decision not to 

waive the prior notice requirement for four interconnection 

agreements that Xcel filed more than four years after the 

effective date chosen by the parties. Xcel’s challenge to the 

ruling on one of the four agreements fails for want of 

standing; as to the other three, we find FERC’s decision 

neither arbitrary nor capricious. 

* * *

Four interconnection agreements are at issue here, but the 

four share origins with a fifth, on which the four disputed ones 

pivot. Public Service Company of Colorado—an affiliate of 

Xcel (and, for simplicity’s sake, also referred to here as 

“Xcel”)—conducted a competitive bidding process that 

resulted in power purchase agreements and five 

interconnection agreements with four companies. Xcel 

entered into all five interconnection agreements at various 

times between January 26, 2001 and October 26, 2001. Xcel 

filed an agreement with Plains End, LLC—the one of the five 

that is not directly at issue here—on August 22, 2001, but a 

dispute arose between the two over the calculation of the 

facilities charge as set forth in the agreement. See Xcel 

Energy Servs., Inc., 100 FERC ¶ 61,267 at 62,016 P 9 (2002). 

FERC conditionally accepted the Plains End agreement on 

September 13, 2002, made it effective as of August 23, 2001, 

and held the facilities charge dispute in abeyance in order to 

permit settlement negotiations between the parties. Id. at 

62,019 P 33. The parties reached an agreement on March 12, 

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2004, which FERC accepted on May 27, 2004. See Xcel 

Energy Servs., Inc., 107 FERC ¶ 61,198 (2004). 

Of the four remaining transactions, an agreement was 

initially filed for one in July 2001 (an agreement with 

Fountain Valley Power, LLC), providing for a charge of about 

$31,000 a month. FERC accepted it and granted a waiver 

allowing a retroactive date of February 21, 2001. Agreements 

for the remaining three transactions—two with Black Hills 

Colorado, LLC, and another with BIV Generation Co., LLC—

were also signed in 2001 but not filed with FERC. For about 

three of the next four years, service proceeded while the 

parties awaited resolution of the Xcel-Plains End dispute. As 

we have seen, that wrapped up in March 2004 and FERC 

accepted the result in May. 

Just shy of a year-and-a-half later, on November 14, 

2005, Xcel filed the four “Amended and Restated” 

interconnection agreements now at issue. Each new 

agreement provided for a new facilities charge calculated 

pursuant to the terms of the Plains End settlement agreement. 

We note, and will return to the point later, that the Fountain 

Valley agreement filed in 2005 provided for a charge of about 

$6500 a month; the new rate represented about an 80% 

reduction from the prior filing, presumably due to the 

influence of the Plains End settlement. Xcel requested waiver 

of the 60-day prior notice requirement, asking that each 

agreement be effective as of the 2001 date of the initial 

interconnection agreements. FERC declined to waive the 

prior notice requirement and instead accepted the four 

interconnection agreements with an effective date of January 

13, 2006. Xcel Energy Servs., Inc., Letter Order, Docket Nos. 

ER06-207-000, ER06-208-000. ER06-209-000, ER06-210-

000 (Dec. 23, 2005). 

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Xcel requested rehearing. In an order denying rehearing, 

FERC found that Xcel had failed to show either that the 

agreements fit within the narrow situations in which it was 

willing to grant waiver as a matter of course, or that there 

were “extraordinary circumstances” justifying waiver. Xcel 

Energy Servs. Inc., 114 FERC ¶ 61,295 at 62,048 P 9 (2006) 

(“Order Denying Reh’g”). FERC explicitly rejected the idea 

that the multi-year provision of service under unfiled 

agreements, while the parties awaited resolution of the Plains 

End matter, presented extraordinary circumstances. Id. This 

petition followed. 

* * * 

Standing. Before we can reach the substance of Xcel’s 

petition for review, we must address two issues related to its 

standing. 

Xcel describes a financial arrangement underlying all 

four interconnection agreements that seems—at least at first 

glance—somewhat odd. Those interconnection agreements 

provide for Xcel to collect monthly facilities charges from its 

counterparts, but power purchase agreements between the 

parties require Xcel to reimburse its counterparts for those 

charges in the same amount. Thus it would seem that what 

Xcel takes it then gives away, resulting in a net gain of 

nothing (or, more important for our purposes, a loss of 

nothing from FERC’s decision not to waive the prior notice 

requirement). But Xcel explains that this odd arrangement is 

in fact a stepping stone to a financial recovery: collection and 

reimbursement are a predicate to Xcel’s recovering the 

amounts of its reimbursements from its retail customers. So 

while the net effect between Xcel and its counterparts is zero, 

Xcel’s net injury is not. As a direct effect of FERC’s refusal 

to waive the prior notice requirement and permit an earlier 

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effective date for these agreements, Xcel cannot recover those 

amounts from its retail customers. FERC offers nothing to 

contradict this analysis. Thus Xcel has an injury-in-fact—

except as to one agreement. 

As to the fourth agreement the math fails. Xcel admits 

that one of its interconnection agreements with Black Hills 

Colorado, one related to the Valmont Generating Facility, 

establishes a $0 monthly facilities charge. Because Xcel 

collects nothing, it also reimburses nothing, so the agreement 

gives it no ability to recover any amounts from retail 

customers. Xcel essentially concedes that FERC’s decision 

not to waive the prior notice requirement for this agreement 

caused it no harm, but it nonetheless asks that we review the 

decision simply because FERC addressed this interconnection 

agreement in the same orders in which it addressed the others. 

That coincidence provides no substitute for injury-in-fact, and 

thus we dismiss the petition for review for lack of subjectmatter jurisdiction insofar as it challenges FERC’s orders in 

Docket No. ER06-208. 

Merits. The filing and prior notice requirements of 

section 205 of the Federal Power Act, 16 U.S.C. § 824d, and 

FERC regulations, 18 C.F.R. § 35.3, provide FERC with 

timely information from which it can “monitor[] the 

reasonableness of prices and undue discrimination in the 

marketplace” and “assist the public in filing complaints” by 

providing it with “good information about energy 

transactions.” Revised Public Utility Filing Requirements, 99 

FERC ¶ 61,107 P 46 (2002). The interconnection agreements 

at issue here should have been filed with FERC not less than 

60 days before going into effect, but FERC can waive that 

prior notice requirement “[u]pon application and for good 

cause shown.” 18 C.F.R. § 35.11. Xcel argues that it was 

entitled to a waiver under existing precedent. 

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In a matter decided well before the transactions here, 

Central Hudson Gas & Elec. Corp., 60 FERC ¶ 61,106, reh’g 

denied, 61 FERC ¶ 61,089 (1992), FERC reconsidered and 

explained its policy towards waiver of the 60-day prior notice 

requirement. FERC stated that it would generally grant 

waivers for: (1) “uncontested filings that do not change rates,” 

(2) “filings that reduce rates and charges,” and (3) “filings that 

increase rates when the rate change and the effective date are 

prescribed by contract.” Id. at 61338. But “absent a strong 

showing of good cause” FERC would “deny requests for 

waiver of notice for rate increases that do not implement a 

contract requirement.” Id. at 61339. 

For filings that provide for new service, as here, Central 

Hudson gives great weight to whether the agreement was filed 

before or after the commencement of that service. If the 

agreement was filed prior to the commencement of service 

FERC will grant a waiver “if good cause is shown,” but if an 

agreement was filed on or after the day service has 

commenced, FERC will not grant a waiver “[a]bsent 

extraordinary circumstances.” Id. A year after Central 

Hudson, FERC decided to eliminate the extraordinary 

circumstances test “for waiver for the filing of service 

agreements under umbrella tariffs” and to grant waiver of 

notice “if service agreements are filed within 30 days after 

service commences.” Prior Notice and Filing Requirements 

Under Part II of the Federal Power Act, 64 FERC ¶ 61,139 at 

61984, order on reh’g, 65 FERC ¶ 61,081 (1993) (“Prior 

Notice”). FERC expressly reaffirmed, however, that it would 

“not relax the ‘extraordinary circumstances’ standard of 

waiver for any other type of agreement for new service.” Id.

Xcel claims that the monthly access charges reflected in 

the late-filed interconnection agreements hinged on the 

negotiations and eventual settlement between Xcel and Plains 

End, and that therefore extraordinary circumstances existed: 

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earlier filing would have merely resulted in more timeconsuming dispute resolution at the expense of FERC 

resources. Further, Xcel invokes the value of private 

contracts; the parties have agreed to an effective date in each 

of the interconnection agreements, and Xcel reasons that 

FERC’s refusal to grant waivers under such circumstances 

conflicts with precedents—FERC’s, ours, and the Supreme 

Court’s (the Mobile-Sierra doctrine, see United Gas Pipe Line 

Co. v. Mobile Gas Serv. Corp., 350 U.S. 332 (1956))—that 

favor enforcement of contractual commitments. 

“Our review of the Commission’s waiver rulings is ‘quite 

limited,’ as ‘Congress, through § 205, has clearly delegated 

waiver discretion to the Commission and not to the Courts.” 

NSTAR Elec. & Gas Corp. v. FERC, 481 F.3d 794, 799 (D.C. 

Cir. 2007) (quoting City of Girard v. FERC, 790 F.2d 919, 

925 (D.C. Cir. 1986)). Since Xcel could readily have filed all 

four disputed agreements pending the outcome of the Plains 

End negotiations (or agency and court proceedings if 

necessary), it seems far from arbitrary for the Commission to 

find that the pendency of those discussions, and the parties’ 

apparent intent to use their outcome as a model, were not 

extraordinary circumstances. 

This is all the more evident from the strange case of 

Xcel’s agreements with Fountain Valley. Xcel did file the 

initial agreement in that case; the rates contained in the 

amended agreement, which FERC refused to make 

retroactive, included rates about 80% lower than those in the 

initial filing. So a simple mechanism for handling the parties’ 

problem was obviously available. 

As to Fountain Valley, of course, the amended agreement 

appears to fit within the second of Central Hudson’s examples 

of waivers that are granted readily—“filings that reduce rates 

and charges.” In its reply brief, Xcel claims for the first time 

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that FERC should have considered waiver of the prior notice 

requirement for its amended Fountain Valley agreement under 

that relaxed standard. (Xcel’s Reply Br. 16). Xcel has twice 

waived this argument, Consol. Edison Co. of N.Y. v. FERC, 

347 F.3d 964, 970 (D.C. Cir. 2003), by failing to present it to 

FERC as required by § 313(b) of the Federal Power Act, 16 

U.S.C. § 825l(b), and by failing to raise it in its opening brief 

here, see Power Co. of Am. v. FERC, 245 F.3d 839, 845 (D.C. 

Cir. 2001). We are perplexed at the net result of FERC’s 

delaying the filing of a rate-reducing amended agreement, but 

Xcel’s quest for review suggests strongly that the initial filing 

at the far higher rate yielded no revenue that Xcel has been 

able to keep. In any event, we have no jurisdiction over the 

matter. 

Perhaps recognizing the weakness of its efforts to fit its 

claim within the precepts of Central Hudson or Prior Notice, 

Xcel points us to cases that predate Central Hudson. See City 

of Holyoke Gas & Elec. Dep’t v. FERC, 954 F.2d 740 (D.C. 

Cir. 1992); City of Girard, 790 F.2d 919; City of Piqua v. 

FERC, 610 F.2d 950 (D.C. Cir. 1979). We are uncertain 

whether these cases provide much support for Xcel’s claims, 

and in any event we don’t see how any such support survives 

the express reconsideration and restatement of FERC policy in 

Central Hudson and Prior Notice. 

Finally, we have no jurisdiction to address Xcel’s 

separate argument that FERC’s decision not to waive the prior 

notice requirement imposed a penalty that departed 

dramatically from agency precedent. In Prior Notice, FERC 

determined that “if waiver is denied and [a proposed just and 

reasonable] rate goes into effect after service has commenced, 

we will require the utility to refund to its customers the time 

value of the revenues collected . . . for the entire period that 

the rate was collected without Commission authorization.” 64 

FERC ¶ 61,139 at 61979 (footnote omitted). Because Xcel 

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never collected charges under its late-filed agreements, 

however, it argues that FERC’s decision not to waive the prior 

notice requirement has effectively deprived Xcel of the ability 

to collect those charges at all—a greater penalty than mere 

refund of the time value of those charges. But this is an 

argument that Xcel needed to urge first before FERC, and 

Xcel’s failure to raise the objection in an application for 

rehearing deprives us of jurisdiction under § 313(b) of the 

Federal Power Act, 16 U.S.C. § 825l(b). See also Pub. Serv. 

Elec. & Gas Co. v. FERC, 485 F.3d 1164, 1169-70 (D.C. Cir. 

2007). 

* * * 

 As to the Black Hills Colorado agreement relating to the 

Valmont facility, we dismiss the petition for lack of standing. 

As to the other three disputed agreements, we uphold FERC’s 

orders and deny Xcel’s petition for review. 

So ordered. 

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