Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-02-01034/USCOURTS-caDC-02-01034-0/pdf.json

Parties Involved:
Ameren Services Company
Petitioner
Federal Energy Regulatory Commission
Respondent
Rolla Municipal Utilities
Intervenor

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 February 25, 2003 Decided June 6, 2003

No. 02-1034

AMEREN SERVICES COMPANY,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

ROLLA MUNICIPAL UTILITIES,

INTERVENOR

On Petition for Review of Orders of the

Federal Energy Regulatory Commission

Douglas O. Waikart argued the cause for the petitioner.

Alan J. Statman and Amanda M. Riggs were on brief.

David H. Coffman, Attorney, Federal Energy Regulatory

Commission, argued the cause for the respondent. Cynthia

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #02-1034 Document #753313 Filed: 06/06/2003 Page 1 of 13
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A. Marlette, General Counsel, and Dennis Lane, Solicitor,

Federal Energy Regulatory Commission, were on brief.

Margaret A. McGoldrick was on brief for the intervenor.

Cynthia S. Bogorad entered an appearance.

Before: GINSBURG, Chief Judge, and HENDERSON and

RANDOLPH, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Petitioner Ameren Services Company (Ameren) challenges the Federal

Energy Regulatory Commission’s (FERC or Commission)

interpretation of a settlement agreement entered into in 1997

between Ameren and Intervenor Rolla Municipal Utilities

(Rolla). On August 24, 2001, Ameren filed with FERC an

unexecuted Network Integration Transmission Service

Agreement (SA) governing its unbundled transmission service

to Rolla. The Commission accepted the unexecuted SA for

filing but—relying on the aforementioned settlement agreement—rejected Ameren’s calculation of the ‘‘distribution

charge’’ to be paid by Rolla for Rolla’s use of certain facilities

owned and operated by Ameren’s public utility affiliates.

Ameren Servs. Co., 97 F.E.R.C. ¶ 61,067 (2001) (Order Accepting SA). Ameren filed a request for rehearing, which the

Commission denied, relying once again on the language of the

settlement agreement. Ameren Servs. Co., 97 F.E.R.C.

¶ 61,343 (2001) (Order Denying Rehearing).

On review, Ameren argues that the Commission erred in

finding that the settlement agreement between Ameren and

Rolla unambiguously prohibits Ameren from adjusting Rolla’s

distribution charge in order to take into account costs that

Ameren incurred before the effective date of their agreement.

Ameren further argues that the Commission improperly ignored extrinsic evidence and, in addition, impermissibly

changed its rationale. We disagree and, accordingly, deny

the petition for review.

I.

Ameren acts as the transmission provider and agent for

two public utility affiliates: Central Illinois Public Service

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Company and Union Electric Company. On October 15,

1997, the Commission approved a settlement agreement between Union Electric Company and certain of its municipal

customers—including Rolla—to effectuate the transition of

those customers from ‘‘bundled’’ to ‘‘unbundled’’ transmission

service.1

 Union Elec. Co., 81 F.E.R.C. ¶ 61,011 (1997). Pursuant to that agreement, Ameren filed with the Commission

on October 26, 1999 a document entitled ‘‘Principles Governing Charges and Loss Factors for Wholesale Direct Assignment Facilities’’ (Principles Document). The Principles Document memorialized the agreement among the parties on the

methodology for calculating each municipal customer’s ‘‘distribution charge’’—i.e., the charge for using the Wholesale

Direct Assignment Facilities owned and operated by Ameren’s public utility affiliates. See Principles Document §§ A.1–

A.4. A customer’s distribution charge takes effect once the

customer begins to receive unbundled transmission service

from Ameren.

Section A.1 of the Principles Document provides that a

municipal customer’s distribution charge ‘‘shall be calculated

by applying an annual carrying charge of 16.42% to the

original installed cost of Wholesale Direct Assignment Facilities applicable to such customer TTT as shown on the list

attached to this Agreement as Attachment A.’’ Id. § A.1. It

further states that ‘‘[t]he resultant charges for Wholesale

Direct Assignment Facilities (absent adjustment as provided

for below) are also set forth in Attachment A.’’ Id. Attachment A lists Rolla’s preliminary annual distribution charge as

$309,374 and its adjusted annual distribution charge as

$288,811.2

 Id. at Attachment A.

1 See Transmission Access Policy Study Group v. FERC, 225

F.3d 667, 682–83 (D.C. Cir. 2000) (per curiam) (discussing FERC’s

orders mandating so-called ‘‘functional unbundling,’’ i.e., the separation of a utility’s ‘‘wholesale transmission functions’’ from its ‘‘wholesale electricity merchant functions’’), aff’d sub nom. New York v.

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

2 Rolla’s adjusted annual distribution charge ‘‘reflect[s] the

purchase, by Rolla, of certain distribution facilities serving Rolla.’’

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The distribution charge ‘‘adjustment[s]’’ referred to in Section A.1 are explained in the three subsequent provisions,

only one of which (Section A.2) is relevant here.3

 Allowing

for the adjustment of a customer’s distribution charge in

certain limited circumstances, Section A.2 provides, in pertinent part, as follows:

If the Transmission Provider [Ameren] makes significant modifications to Wholesale Direct Assignment

Facilities TTT or if there is a change in ownership or

reclassification of Wholesale Direct Assignment Facilities, then the 16.42% annual carrying charge

would be applied to the original installed cost adjusted to take account of the change in the Wholesale

Direct Assignment Facilities.

Principles Document § A.2 (footnote omitted). Section A.2

also prohibits an adjustment for specific types of facility

modifications, namely: (1) any adjustment ‘‘to take account of

changes in the Wholesale Direct Assignment Facilities that

would properly be recorded as an operating and maintenance

charge under the Uniform System of Accounts’’ and (2) any

adjustment that would change the distribution charge by less

than the ‘‘deadband’’ of $1,000 per month. Id. Lastly,

Section A.2 requires Ameren to consult with affected customers before proceeding with ‘‘significant’’ facility modifications—i.e., those exceeding the deadband. Id.

Principles Document, Attachment A n.3. At oral argument, counsel

explained that Rolla purchased the aforementioned distribution

facilities from Ameren before the effective date of their agreement.

The purchase reduced the ‘‘original installed cost’’ of Ameren’s

Wholesale Direct Assignment Facilities and, as a result, similarly

reduced Rolla’s annual distribution charge.

3 Section A.3 allows for an adjustment to the distribution

charge ‘‘in the event [Ameren] recovers all or part of the costs

associated with the Wholesale Direct Assignment Facilities under

other contractual arrangement[s] with the Transmission Customer

(or its retail customers).’’ Principles Document § A.3. Section A.4

addresses the allocation of—and adjustments to—the ‘‘original cost’’

of ‘‘jointly-used’’ Wholesale Direct Assignment Facilities. Id. § A.4.

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On January 1, 2001, Rolla began taking unbundled transmission service from Ameren’s public utility affiliates. Shortly thereafter, on January 31, 2001, Ameren filed an unexecuted SA with the Commission governing Rolla’s transmission

service, requesting an effective date of January 1, 2001.

After resolving some of the disputed issues with Rolla, Ameren filed a revised, unexecuted SA with the Commission on

August 24, 2001. The unexecuted SA included an annual

distribution charge of $446,664 rather than the adjusted

annual distribution charge of $288,811 set forth in Attachment

A. Ameren calculated a higher distribution charge because

its measure of the Wholesale Direct Assignment Facilities

serving Rolla—unlike the measure in Attachment A—included the additional costs of (1) upgrading Ameren’s Phelps

substation in mid–1997 and (2) modifying that substation’s

control panel in December 2000. As a result of the increased

charge, Rolla filed a protest with the Commission on September 14, 2001, challenging Ameren’s calculation of its distribution charge.

The Commission issued its initial order on October 23,

2001, accepting the unexecuted SA for filing, but rejecting,

inter alia, Ameren’s calculation of Rolla’s distribution charge.

Order Accepting SA, 97 F.E.R.C. at 61,360. Although Ameren maintained that the charges set forth in Attachment A

were ‘‘merely illustrative,’’ the Commission concluded that the

plain language of the Principles Document indicated otherwise: ‘‘ ‘[t]he resultant charges for Wholesale Direct Assignment Facilities [are] set forth in Attachment A.’ ’’ Id. (quoting Principles Document § A.1). The Commission further

concluded that, ‘‘even assuming that the Attachment A costs

were illustrative only,’’ the Principles Document ‘‘precluded

[Ameren] from collecting its proposed charge by operation of

the four-year moratorium agreed to by the parties.’’4

 Id.

4 Section C of the Principles Document provides, in pertinent

part, that ‘‘[t]he above specified principles shall govern determination of Wholesale Direct Assignment Facilities Charges TTT for no

less than four years from the date of filing (‘Moratorium Period’),

after which time the methodology and procedures for determining

Wholesale Direct Assignment Facilities Charges TTT may be

changed TTT.’’ Principles Document § C.

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Accordingly, the Commission ordered Ameren to revise the

unexecuted SA to provide for an annual distribution charge of

$288,811. See id.

On December 21, 2001, the Commission denied Ameren’s

request for rehearing. Order Denying Rehearing, 97

F.E.R.C. at 62,597. In that order, the Commission specifically rejected Ameren’s assertion that Section A.2 of the Principles Document ‘‘entitle[d] Ameren to recover pre-settlement

costs TTT that were known to exist at the time [of its

agreement with Rolla]’’ but not included in the agreement

itself. Id. The Commission interpreted Section A.2 to permit adjustments to the distribution charge only ‘‘(1) where

Ameren ‘makes significant modifications to Wholesale Direct

Assignment Facilities[ ]’ or (2) ‘if there is a change of ownership or reclassification of Wholesale Direct Assignment Facilities.’ ’’ Id. (quoting Principles Document § A.2). Relying on

the words ‘‘makes’’ and ‘‘change,’’ the Commission reasoned

that ‘‘[b]oth conditions expressly contemplate actions or

events occurring after the date of the settlement.’’ Id. (emphasis in original). Because the modifications at issue were

made before the filing of the Principles Document,5

 the

Commission concluded that Section A.2 did not authorize

Ameren to include the costs of the modifications in Rolla’s

distribution charge. Id. The Commission also rejected Ameren’s interpretation of the moratorium provision and instead

concluded that the Principles Document precluded Ameren

from seeking an adjustment of Rolla’s distribution charge not

otherwise sanctioned by Section A.2. Id.

II.

Ameren argues on review that the Commission erred in

concluding that the Principles Document unambiguously pro5 Although Ameren modified the Phelps substation’s control

panel in December 2000, that is, after the filing of the Principles

Document, recovery of these costs would raise Rolla’s distribution

charge by only $5,974 annually. Thus, by itself, the control panel

modification does not exceed the deadband. See Principles Document § A.2 (distribution charge adjustment must exceed deadband

of $1000/month).

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hibits Ameren from adjusting Rolla’s distribution charge as

set forth in the unexecuted SA. When read as a whole,

Ameren maintains, the Principles Document demonstrates

that the distribution charge for each customer is to be

determined by applying the 16.42% annual carrying charge to

the cost of the Wholesale Direct Assignment Facilities applicable to each customer at the time that customer commences

unbundled service. Thus, under Ameren’s reading of the

Principles Document, the distribution charges set forth in

Attachment A ‘‘merely TTT illustrate the charges that would

result from application of the agreed upon settlement methodology.’’ Br. for Pet’r at 27. Asserting that the Commission’s orders turn on an erroneous finding that the plain

language of the Principles Document prohibits the aforementioned interpretation, Ameren seeks a remand for further

proceedings.6

In reviewing the Commission’s interpretation of the Principles Document, we employ a variation of the now familiar

‘‘two-step’’ first performed by the United States Supreme

Court in Chevron U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984). See Cajun Elec. Power

Coop. v. FERC, 924 F.2d 1132, 1135–36 (D.C. Cir. 1991)

(Chevron deference applies to agency interpretation of

agency-approved contract); see also Appalachian Power Co.

v. FERC, 101 F.3d 1432, 1435 (D.C. Cir. 1996) (same). Applying Chevron in this context, we first consider de novo

whether the settlement agreement unambiguously addresses

the matter at issue. Cajun, 924 F.2d at 1136. If so, the

language of the agreement controls for we ‘‘must give effect

to the unambiguously expressed intent of’’ the parties. Chevron, 467 U.S. at 843; see Cajun, 924 F.2d at 1136. If the

6 In the alternative, Ameren maintains that ‘‘the [c]ourt would

be fully justified in reversing the Commission’s decision for failure

to satisfy the test of reasoned decision-making.’’ Br. for Pet’r at 39.

Ameren is mistaken. As we explain in the text, remand to the

agency is the appropriate disposition ‘‘if an agency decision turns on

an erroneous assertion that the plain language of [a settlement

agreement] is unambiguous.’’ Cajun Elec. Power Coop. v. FERC,

924 F.2d 1132, 1136 (D.C. Cir. 1991).

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settlement agreement is ambiguous, however, we then examine the Commission’s interpretation7

 of that agreement ‘‘under the deferential ‘reasonable’ standard.’’ Cajun, 924 F.2d

at 1136. If the Commission’s decision ‘‘turns on an erroneous

assertion that the plain language of the relevant wording is

unambiguous,’’ as Ameren alleges here, ‘‘we must remand’’

the matter to the Commission ‘‘to require the agency to

consider the question afresh in light of the ambiguity we see.’’

Id.

Thus, the only question before us is whether the Commission correctly concluded that the Principles Document unambiguously prohibits distribution charge adjustments based on

costs Ameren incurred before October 26, 1999—the date

Ameren filed the Principles Document. A contract is ambiguous if it is ‘‘ ‘reasonably susceptible of different constructions

or interpretations,’ ’’ Consol. Gas Transmission Corp. v.

FERC, 771 F.2d 1536, 1544 (D.C. Cir. 1985) (quoting Lee v.

Flintkote Co., 593 F.2d 1275, 1282 (D.C. Cir. 1979)), not

simply ‘‘because the parties later disagree on its meaning,’’

Bennett Enters., Inc. v. Domino’s Pizza, Inc., 45 F.3d 493,

497 (D.C. Cir.), cert. denied, 516 U.S. 863 (1995). We determine the plain meaning of a contract ‘‘from the language used

by the parties to express their agreement.’’ WMATA v.

Mergentime Corp., 626 F.2d 959, 961 (D.C. Cir. 1980). ‘‘In

performing this task, [we] should construe the contract as a

whole so as to give meaning to all of the [contract’s] express

terms.’’ Id.

In the Commission’s view, the plain language of the Principles Document unambiguously prohibits distribution charge

7 The Commission may consider extrinsic evidence only if the

settlement agreement is ambiguous. Appalachian Power, 101 F.3d

at 1435 (citing Consol. Gas Transmission Corp. v. FERC, 771 F.2d

1536, 1546 (D.C. Cir. 1985)). Because we conclude that the Commission correctly found that the Principles Document unambiguously prohibits Ameren from adjusting Rolla’s distribution charge

based on costs Ameren incurred before October 26, 1999, we need

not consider Ameren’s argument that the Commission improperly

ignored extrinsic evidence in reaching its decision.

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adjustments based on costs Ameren incurred before the

October 26, 1999 filing date.8

 See Order Denying Rehearing,

97 F.E.R.C. at 62,597. As the Commission emphasizes on

review, its interpretation relies primarily on Section A.2’s

combined use of the subjunctive voice and present tense.

Principles Document § A.2 (‘‘If the Transmission Provider

makes significant modifications TTT or if there is a change in

ownership or reclassification TTT, then the 16.42% annual

carrying charge would be applied to the original installed cost

adjusted to take account of the change in the Wholesale

Direct Assignment Facilities.’’) (emphasis added). The Commission points out that the verb ‘‘make’’ means, inter alia,

‘‘bring[ing] about (a condition of things)’’ and that ‘‘such

language contemplates that only future modifications, occurring after the filing date of the [Principles Document], will

trigger adjustments in [the] distribution charge.’’ Br. for

Resp’t at 13–14 (citing THE NEW SHORTER OXFORD DICTIONARY

1671 (1993)); see Order Denying Rehearing, 97 F.E.R.C. at

62,597 (‘‘[T]he word ‘makes,’ as it appears in [Section A.2],

does not implicate the modifications made to the Phelps

substation in [1997], which could only be described by the

addition of a past tense verb, i.e., ‘makes or made.’ ’’). Similarly, asserting that the word ‘‘change’’ makes sense only ‘‘if

at the time of filing there was a status quo that could be

altered,’’ the Commission likewise contends that ‘‘the ‘change’

referred to would have to occur after the filing date.’’ Br. for

Resp’t at 14 (emphasis in original); see Order Denying

Rehearing, 97 F.E.R.C. at 62,597 (‘‘[T]he word ‘change’ can

only have meaning by reference to the status quo as it existed

at the time of the settlement.’’). Because Ameren’s upgrade

of the Phelps substation occurred in mid–1997, the Commission maintains that it correctly concluded that the Principles

8 Ameren claims that the Commission’s orders do not reflect

reasoned decision-making because the Order Denying Rehearing

‘‘supplied a new rationale’’ for the agency’s decision. Br. for Pet’r

at 43. This argument is without merit. The very purpose of

rehearing is to give the Commission the opportunity to review its

decision before facing judicial scrutiny.

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Document unambiguously prohibits Ameren’s proposed adjustment of Rolla’s distribution charge.

We agree with the Commission that Section A.2’s language

necessarily contemplates a baseline date from which to measure distribution charge adjustments. But what is the baseline date? The Commission argues, quite reasonably, that

the effective date of the agreement—October 26, 1999—is the

only possible baseline from which to measure the distribution

charge adjustments authorized by Section A.2. Ameren, on

the other hand, contends that the Principles Document may

just as reasonably be construed as including distribution

charge adjustments for any modifications made after the

issuance of the 1992 Allocation Study, i.e., the study used to

derive the ‘‘original installed cost of Wholesale Direct Assignment Facilities’’ listed in Attachment A. We disagree with

Ameren.

As an initial matter, Ameren’s interpretation stands for a

peculiar proposition—that the parties entered into an agreement that afforded ‘‘no certainty to [their] rights and obligations even as to those facts and circumstances that were

known to exist at that time.’’ Order Denying Rehearing, 97

F.E.R.C. at 62,597 (emphasis in original). However, if the

parties had intended the distribution charges listed in Attachment A to be merely ‘‘illustrative,’’ as Ameren contends, that

intent should be clear within the four corners of the Principles Document. But Ameren can point to no language reflecting such intent. Indeed, as Rolla emphasizes on review,

‘‘[n]o form of the word ‘illustrative’ appears anywhere in the

[Principles Document].’’ Br. for Intervenor at 5. To the

contrary, the Principles Document expressly states that ‘‘[t]he

resultant charges for Wholesale Direct Assignment Facilities

(absent adjustment as provided for below) are TTT set forth in

Attachment A.’’ Principles Document § A.1 (emphasis added).9

9 The phrase ‘‘absent adjustment as provided for below’’ plainly

refers to the adjustments expressly allowed by Sections A.2, A.3

and A.4 of the Principles Document. See Principles Document

§§ A.1–A.4; supra note 3 and accompanying text. Although the

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More importantly, Ameren’s reading of Section A.2 strains

both the language and structure of the Principles Document.

To begin with, pre-settlement modifications—including those

made after the 1992 Allocation Study but before the October

26, 1999 filing date—are modifications that Ameren ‘‘has

made’’ rather than those Ameren ‘‘makes’’ subsequent to the

effective date of the agreement. See Principles Document

§ A.2. Section A.4 casts similar doubt on the reasonableness

of Ameren’s reading of Section A.2.10 Addressing ‘‘jointlyused’’ Wholesale Direct Assignment Facilities, Section A.4

provides that the ‘‘original cost’’ of such facilities ‘‘shall be

allocated using [Ameren’s] 1992 Allocation Study TTT the

results of which are reflected in Attachment A.’’ Principles

Document § A.4. In addition, Section A.4 expressly authorizes certain pre-settlement adjustments:

This allocation of jointly-used facilities shall be

changed only if a party can show that material

Commission omitted the phrase from its initial decision, see Order

Accepting SA, 97 F.E.R.C. at 61,360, the Order Denying Rehearing

explained that, under Section A.2, Ameren may adjust a customer’s

distribution charge in ‘‘two limited circumstances,’’ Order Denying

Rehearing, 97 F.E.R.C. at 62,597. Thus, contrary to Ameren’s

contention, the Commission did not interpret the Principles Document as precluding any and all adjustments from the distribution

charges set forth in Attachment A.

10 Ameren mistakenly claims that the Commission’s reliance on

Section A.4 constitutes an ‘‘impermissible post hoc rationalization’’

because the agency did not rely on this provision in either of the

orders under review. Reply Br. at 3. Although ‘‘post hoc rationalizations cannot support an affirmance of an agency decision based on

an otherwise invalid rationale,’’ the Commission does not ask ‘‘us to

substitute a post hoc, and therefore unacceptable, rationale for an

otherwise invalid rationale rejected by the court on review.’’ America’s Cmty. Bankers v. FDIC, 200 F.3d 822, 835 (D.C. Cir. 2000).

On the contrary, the Commission offers on review ‘‘a persuasive

interpretation’’ of Section A.4 that is ‘‘consistent’’ with its overall

reading of the Principles Document. Id. Accordingly, ‘‘[t]here is

no difficulty in our reviewing the TTT language [of the Principles

Document] de novo.’’ Id. at 835–36.

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change occurred after 12/31/97 in the relative usage

of such Wholesale Direct Assignment Facilities between and among retail and wholesale customers.

Id. The absence of a comparable provision in Section A.2

strongly suggests that the parties did not intend for presettlement events to trigger similar adjustments under Section A.2. See Halverson v. Slater, 129 F.3d 180, 185 (D.C.

Cir. 1997) (‘‘the mention of one thing implies the exclusion of

another thing’’) (internal quotations omitted). Indeed, the

express incorporation of pre-settlement adjustments within

Attachment A itself—including an adjustment to Rolla’s distribution charge—further undermines Ameren’s interpretation for it indicates that the parties were well aware of how to

adjust distribution charges for changes occurring before October 26, 1999. See supra note 2.

We find Ameren’s arguments to the contrary unpersuasive.

To support its claim that the distribution charges listed in

Attachment A are merely illustrative, Ameren relies chiefly

upon the use of the word ‘‘methodology’’ in the cover letter

that accompanied its October 26, 1999 filing.11 Yet the cover

letter’s use of the word ‘‘methodology’’ is entirely consistent

with Commission’s interpretation of the Principles Document—i.e., the Principles Document establishes a methodology for adjusting the distribution charges listed in Attachment

A to take account of changes occurring after October 26, 1999.

See Order Denying Rehearing, 97 F.E.R.C. at 62,597. Moreover, the cover letter lends no support to Ameren’s claim that

the 1992 Allocation Study serves as the baseline from which

to measure distribution charge adjustments.

Ameren’s reliance on the language of Section A.1 is similarly misplaced. As earlier noted, Section A.1 provides that

each customer’s distribution charge ‘‘shall be calculated by

11 While we need not decide the question here, we are doubtful

that the cover letter on which Ameren relies is even relevant to our

inquiry into the Principles Document’s plain meaning. See Mid–

Continent Area Power Pool, 97 F.E.R.C. ¶ 61,038, 61,184 (2001)

(‘‘submittal’’ does not include ‘‘cover letter’’), remanded on other

grounds, 305 F.3d 780 (8th Cir. 2002).

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applying an annual carrying charge of 16.42% to the original

installed cost of Wholesale Direct Assignment Facilities applicable to such customer.’’ Principles Document § A.1. Reading the phrase ‘‘shall be calculated’’ in a predictive sense,

Ameren argues that the Principles Document simply establishes the methodology for calculating a customer’s distribution charge once that customer begins to receive unbundled

transmission service.12 Ameren’s interpretation ignores, however, the phrase that immediately follows: ‘‘as shown on the

list attached to this Agreement as Attachment A.’’ Id. Further, Ameren’s argument suffers from a more critical error of

omission: it fails to account for the final—and crucial—

sentence of Section A.1: ‘‘The resultant charges for Wholesale Direct Assignment Facilities (absent adjustment as provided for below) are also set forth in Attachment A.’’ Id.

(emphasis added).13

III.

For the foregoing reasons, we conclude that the Principles

Document unambiguously prohibits Ameren from adjusting

Rolla’s distribution charge in order to take into account costs

that it incurred before October 26, 1999. Ameren’s petition

for review is therefore denied.

So ordered.

12 We find Ameren’s ‘‘predictive’’ reading of the phrase ‘‘shall

be calculated’’ somewhat strained. As Rolla observes on review,

‘‘[t]he word ‘shall,’ when utilized in laws, directives, and the like,

means ‘must’ or ‘is or are obligated to.’ ’’ Bell Atl.-New Jersey v.

Tate, 962 F. Supp. 608, 616 n.6 (D.N.J. 1997) (quoting RANDOM

HOUSE WEBSTER’S COLLEGE DICTIONARY 1230 (1991)). Here, the

phrase ‘‘shall be calculated’’ simply reflects Ameren’s obligation to

calculate each customer’s distribution charge using the agreed upon

methodology.

13 Because we agree with the Commission’s conclusion that

Sections A.1 and A.2 prohibit Ameren from increasing Rolla’s

distribution charge for modifications made before October 26, 1999,

we need not address Ameren’s challenge to the Commission’s

interpretation of the moratorium provision in Section C.

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