United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 14, 2012 Decided March 27, 2012 

No. 10-1381 

OCCIDENTAL PERMIAN LTD., ET AL., 

PETITIONERS

v. 

FEDERAL ENERGY REGULATORY COMMISSION, 

RESPONDENT

PSEG ENERGY RESOURCES & TRADE LLC, ET AL., 

INTERVENORS

On Petition for Review of Orders of the 

 Federal Energy Regulatory Commission 

Earle H. O'Donnell argued the cause for petitioners. 

With him on the briefs were Jane E. Rueger and Jennifer L. 

Mersing. 

Jennifer S. Amerkhail, Attorney, Federal Energy 

Regulatory Commission, argued the cause for respondent. 

With her on the brief was Robert H. Solomon, Solicitor. 

David B. Raskin was on the brief for intervenor Tres 

Amigas LLC in support of respondent. 
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Before: HENDERSON, ROGERS, and BROWN, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge BROWN.

 BROWN, Circuit Judge: Occidental Permian 

(“Occidental”) and a number of its subsidiaries petition for 

review of final orders of the Federal Energy Regulatory 

Commission (“FERC”) granting negotiated rate authority to 

Tres Amigas, a proposed energy transmission project. 

Occidental argues Tres Amigas does not satisfy the criteria 

FERC has set out as preconditions for such authority. 

Because we conclude Occidental lacks standing to challenge 

these orders, we do not reach this question and instead 

dismiss the petition. 

I 

 Tres Amigas is a multi-billion dollar energy transmission 

project being developed in New Mexico. Its goal is to tie 

together all three of the independent electrical grids in the 

United States. As these grids currently operate, power cannot 

automatically flow between them but instead must be 

converted at each interchange. Tres Amigas says its facility 

will address this problem and remove structural barriers to the 

movement of power across the country by providing a threeway transmission “superstation” with a transfer capability 

greater than all the existing interconnections combined. New 

technological developments will also permit Tres Amigas to 

move power across the grids at shorter notice and lower cost 

while at the same time integrating renewable sources of 

energy like wind and solar power. In order for any of these 

goals to reach fruition, though, regional utilities will 

themselves have to build new transmission lines connecting to 

Tres Amigas, at significant cost. The Tres Amigas project 
3 

itself is solely an interconnection facility; like a train station 

without any tracks, it alone connects to nothing. 

Under the Federal Power Act (“the Act”), utilities must 

file tariff schedules with FERC, and FERC must determine 

that the rates the utility plans to charge are just, reasonable, 

and lawful. 16 U.S.C. §§ 824d, 824e. Traditionally, utilities 

and FERC rely on a cost-based pricing model when assessing 

the reasonableness of rates. But merchant transmission 

developers are unlike ordinary utilities. Transmission projects 

have no preexisting transmission network in which costs can 

be determined—they seek to create a network, not operate 

within one—and no captive pool of customers from which 

they can recoup those costs. For these reasons, FERC allows 

transmission developers to request permission to charge 

reasonable negotiated rates, rather than cost-based rates. To 

do so, a transmission project developer must meet a set of 

criteria designed to ensure that the negotiated rate authority 

will not lead to unjust rates: among other things, the 

developer must have no captive customers, must not have the 

ability to exercise monopoly power, and must bear the full 

market risk of the project failing. See Chinook Power 

Transmission, LLC, 126 FERC ¶ 61,134, 61,765 (2009);

TransEnergie U.S., Ltd., 91 FERC ¶ 61,230, 61,838–39 

(2000). 

In December 2009, Tres Amigas filed an application with 

FERC requesting authorization to sell transmission services at 

negotiated rates. In its application, Tres Amigas explained 

that it cannot realistically use cost-based pricing because it 

has no captive customers and, because its beneficiaries will be 

in all three grid regions, it will have no regional transmission 

organization in which it can recover costs or determine costbased rates. Occidental filed a motion to intervene, protest, 

and request summary denial of Tres Amigas’s application. It 
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argued that Tres Amigas failed to meet the Chinook criteria 

because Tres Amigas has captive customers and would 

exercise monopoly power while bearing none of the project’s 

risk. FERC found that Occidental’s concerns were misplaced 

and approved Tres Amigas’s request over Occidental’s 

objections in March 2010. Tres Amigas LLC, 130 FERC ¶ 

61,207 (2010). Occidental requested a rehearing, and FERC 

denied that request in September 2010. Tres Amigas LLC,

132 FERC ¶ 61,233 (2010). This petition for review 

followed. 

II 

 Before we may reach the merits of Occidental’s 

objection, we must first be satisfied that Occidental has 

standing to challenge these orders. Pub. Util. Dist. No. 1 of 

Snohomish Cnty. v. FERC, 272 F.3d 607, 613 (D.C. Cir. 

2001). The “irreducible constitutional minimum” of standing 

requires a petitioner to show a concrete injury that has either 

transpired or is “imminent,” that is causally connected to the 

agency action, and that will likely be redressed by a favorable 

decision from this Court. Lujan v. Defenders of Wildlife, 504 

U.S. 555, 560–61 (1992). A “conjectural or hypothetical” 

injury will not do. Id. at 560. Occidental advances three 

possible injuries it has suffered as a result of FERC’s orders 

approving negotiated rate authority for Tres Amigas. All are 

conjectural or hypothetical. Because none meets the 

constitutional standard, we lack jurisdiction and dismiss 

Occidental’s petition. 

 First, Occidental complains that neighboring utilities will 

themselves have to build transmission lines to connect to Tres 

Amigas. Those utilities will, Occidental argues, in turn 

recover the costs of that construction and connection from 

regional energy consumers like some of Occidental’s 
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subsidiaries. These subsidiaries and other captive customers 

will thus face higher rates along those transmission lines. 

This parade of horribles is far too speculative to represent a 

“concrete” injury to Occidental. Lujan, 504 U.S. at 560. 

Even if all of these additional events transpired, Occidental’s 

injury would be caused by some action other than FERC’s 

approval of the orders before us. 

 Occidental’s alleged injury necessarily relies on the 

premises that neighboring utilities will in fact build 

connecting transmission lines to Tres Amigas, and that they 

will recover costs from captive customers, and that doing so 

will mean higher rates for Occidental’s subsidiaries. None of 

these eventualities is about to occur. First, it remains possible 

that no neighboring utility will successfully build a 

transmission line that connects to Tres Amigas. Though some 

utilities have apparently “stated their willingness” to do so, 

Pet. Br. 16, even the most enthusiastic of plans would not give 

rise to Occidental’s injury since, as Occidental recognizes, 

those utilities’ plans are “subject to appropriate support and 

favorable ratemaking treatment from . . . regulators,” Payton 

Aff. ¶ 16 (quoting an interested utility describing its support 

for the project). No such support has materialized. Those 

connecting utilities have yet to secure siting and planning 

approvals, and FERC has made no decision, favorable or 

otherwise, regarding the rates those connecting utilities would 

be able to charge their customers.

 Even if we knew with certainty that a given utility was 

going to connect to Tres Amigas, the remaining links in 

Occidental’s chain of injury remain uncertain. All FERC has 

done is granted Tres Amigas the authority to negotiate the 

rates it charges connecting utilities; FERC has not granted any 

utility the authority to recover costs from its customers, or for 

that matter, to charge any given rate to its customers at all. 
6 

The question of what rate Occidental’s subsidiaries will pay 

on future connecting lines would thus be the subject of some 

future FERC proceeding, at which FERC would have to 

determine whether that rate was just and reasonable. See 

Tres Amigas LLC, 132 FERC ¶ 61,233, 62,302 (2010) (order 

denying rehearing) (noting that if neighboring utilities 

connect with Tres Amigas, “their customers are protected by 

independent review” of rates charged). If the utility sought to 

shift costs to customers like Occidental’s subsidiaries, FERC 

would have to determine at that time whether or not the 

benefits those customers derived from the connection were 

“trivial in relation to the costs sought to be shifted” to them, 

Illinois Commerce Comm’n v. FERC, 576 F.3d 470, 476 (7th 

Cir. 2009), and Occidental could argue then that the costs 

outweighed the benefits. 

 In fact, Occidental’s very argument on the merits neatly 

reveals the paucity of its present injury. Occidental claims the 

project “fails the most basic element of FERC’s merchant 

transmission policy because it cannot by itself provide 

transmission service to anyone” and because it is “an island 

that is electronically remote from each of the 

interconnections.” Pet. Br. 9, 23–24 (emphasis added). But 

an island that “leaves it to the neighboring utilities to fund the 

construction of the interconnecting” lines, Pet. Br. 27, poses 

no imminent danger to Occidental. Since the Tres Amigas 

project can itself transmit no energy, it would be other 

utilities, their independent decisions to connect to the project, 

and FERC’s future approval of the rates they may charge that 

may cause an injury to Occidental. Such an injury would 

result from some future agency action; it is therefore “not 

traceable” to the agency’s present action. Commuter Rail 

Div. of Reg’l Transp. Auth. v. Surface Transp. Bd., 608 F.3d 

24, 31 (D.C. Cir. 2010). 

 
7 

 In short, FERC has simply not yet determined or 

approved the rates Occidental’s subsidiaries will pay—it has 

not even been asked to do so—so it is impossible to say now 

that Occidental has been harmed. Occidental’s theory of 

injury “stacks speculation upon hypothetical upon 

speculation, which does not establish an actual or imminent 

injury.” New York Reg’l Interconnect v. FERC, 634 F.3d 581, 

587 (D.C. Cir. 2011). 

 Occidental responded at oral argument that although it 

will be able to challenge rates set by connecting utilities at 

future FERC proceedings, the sixty-day window for a 

challenge to a FERC order set out in the Act, 16 U.S.C. § 

825l(b), means this is the only opportunity to challenge the 

decision to grant Tres Amigas negotiated rate authority, Oral 

Arg. 8:30–11:10. Even if Occidental were correct, it goes 

astray in insisting there is something unjust about that result. 

This supposed “catch-22,” as Occidental puts it, is a red 

herring: Occidental cannot challenge the negotiated rate 

orders in this Court because Occidental cannot show an injury 

in fact. Occidental’s lamentations about the absurdity of the 

“catch-22” thus seem to confuse a result which means it 

cannot challenge these negotiated rate orders with a result 

which means no one can challenge these orders. See Pet. 

Reply Br. 8. The latter is plainly not true; some entity 

actually harmed by the negotiated rate orders—perhaps a 

competing transmission project or one of the prospective 

connecting utilities—could have challenged them. And 

Occidental, for its part, will have every opportunity to 

challenge any future orders which do harm its subsidiaries. 

 

 Occidental’s remaining alleged injuries suffer from the 

same flaws. Occidental claims the FERC orders failed to 

“impose sufficiently stringent limitations” that would “ensure 

that Tres Amigas’s transmission rates will be held to a just 
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and reasonable level.” Pet. Br. 18–19. This failure, 

Occidental argues, will increase the energy prices “ultimately 

paid” by its consumer subsidiaries and reduce the profit 

margins of its wholesale seller and marketing subsidiaries. Id. 

But because FERC “has not yet determined . . . rates,” 

Occidental’s fear of a “possible rate increase in the future” is 

“not enough to show the requisite injury.” PNGTS Shippers’ 

Grp. v. FERC, 592 F.3d 132, 137 (D.C. Cir. 2010). To be 

sure, we have said that the “failure to impose more stringent 

limitations on the prices that . . . utilities would be allowed to 

charge” is a cognizable injury, Envtl. Action v. FERC, 996 

F.2d 401, 407 (D.C. Cir. 1993), but we have always required 

actual, decided-upon numbers and limitations before finding 

an injury—“rate ceilings,” in that case, id. at 405—because 

without them, we would have no way of assessing a claim of 

unreasonableness. Here, FERC has made no such decision, 

and once rates are set, Occidental will have the chance to 

challenge them. See Sacramento Mun. Util. Dist. v. FERC, 

616 F.3d 520, 542 (D.C. Cir. 2010). For now, all Occidental 

has is its concern that FERC’s safeguards will “ultimately” 

prove too weak. This is sheer speculation. 

 Moreover, Occidental cannot even show it will 

necessarily suffer the kind of injury discussed in 

Environmental Action. As Occidental acknowledges, it is just 

a “potential” customer of Tres Amigas and will not “transfer 

electric energy or ancillary services over the facility” if Tres 

Amigas raises its prices “above a competitive rate.” Payton 

Aff. ¶ 26. In other words, Occidental plans to avoid the injury 

caused by uncompetitive prices by not marketing or selling 

energy routed through the Tres Amigas facility. As a result, 

all it has is an “interest in [this] problem,” which does not 

satisfy the “requirement of aggrievement” for standing. City 

of Orrville v. FERC, 147 F.3d 979, 985 (D.C. Cir. 1998). 

Because Tres Amigas’s rates may not be unjust, because 
9 

Occidental may not choose to pay them, and because, if the 

rates are unjust and Occidental wants to challenge them, it has 

the chance to seek relief from FERC in the future, this alleged 

injury is also neither cognizably concrete nor traceable to the 

orders under review.

 Finally, Occidental claims that its power marketing 

subsidiaries will suffer increased competition.1

 We have held 

that “parties suffer constitutional injury in fact when agencies 

lift regulatory restrictions on their competitors or otherwise 

allow increased competition,” Louisiana Energy & Power 

Auth. v. FERC, 141 F.3d 364, 367 (D.C. Cir. 1998), but no 

such increased competition has happened yet, nor is it even 

imminent, Sherley v. Sebelius, 610 F.3d 69, 73 (D.C. Cir. 

2010) (“[T]he basic requirement common to all our cases is 

that the complainant show an actual or imminent increase in 

competition.”). The orders under review did not authorize or 

create transmission lines connected to Tres Amigas, nor did 

they lift any restrictions on those lines. Occidental has also 

not even shown that, should those lines be built, cheaper 

power will flow through them and cause Occidental’s 

subsidiaries to actually lose business or lower their prices. As 

we explained in DEK Energy Co. v. FERC, 248 F.3d 1192, 

1196 (D.C. Cir. 2001), “We recognize that whenever a . . . 

vendor secures transport capacity that enables it to ship 

[power] closer to another vendor at competitive rates, the 

latter may perceive an increased risk of competition. But 

[there is only] some vague probability that any [power] will 

actually reach that market and a still lower probability that its 

arrival will cause [petitioner] to lose business or drop its 

 

1

 Occidental argues its ancillary service subsidiaries will also face 

increased competition, but FERC expressly reserved this issue for 

another proceeding. Tres Amigas LLC, 130 FERC ¶ 61,207, 61,909 

(2010). 
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prices. More is needed to move an injury from ‘conjectural’ 

to ‘imminent.’” Occidental has not shown anything more, so 

this final claim of injury is, like the others, insufficient to 

confer standing. 

III 

 Because Occidental lacks standing to challenge the orders 

before the Court, we dismiss the petition for review and 

express no opinion on the merits of Occidental’s objections. 

So ordered.