United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 13, 2018 Decided July 31, 2018

No. 17-1110

NEXTERA ENERGY RESOURCES, LLC, ET AL.,

PETITIONERS

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

CPV POWER HOLDINGS, LP, ET AL.,

INTERVENORS

On Petition for Review of Orders of the 

Federal Energy Regulatory Commission

John N. Estes III argued the cause for petitioners. With 

him on the briefs were John Lee Shepherd, Jr., Cara J. Lewis, 

and Abraham Silverman.

Carol J. Banta, Attorney, Federal Energy Regulatory 

Commission, argued the cause for respondent. On the brief 

were Robert H. Solomon, Solicitor, and Holly E. Cafer, Senior 

Attorney.
2

Jason R. Marshall argued the cause for intervenors. With 

him on the brief were Phyllis G. Kimmel, Larry F. Eisenstat, 

Richard Lehfeldt, Clare E. Kindall, and Robert L. Marconi, 

Assistant Attorneys General, Office of the Attorney General 

for the State of Connecticut. 

John N. Moore was on the brief for amicus curiae Natural 

Resources Defense Council, et al. in support of respondent.

Before: WILKINS, Circuit Judge, and SENTELLE and 

RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge 

SENTELLE.

SENTELLE, Senior Circuit Judge: A group of power 

generation companies, utility holding companies, and power 

distribution and sales companies petitions for review of four 

Federal Energy Regulatory Commission (“FERC” or “the 

Commission”) orders. ISO New England Inc. (“ISO-NE”), 147 

FERC ¶ 61,173 (May 30, 2014), reh’g denied, 150 FERC 

¶ 61,065 (Jan. 30, 2015); ISO-NE, 155 FERC ¶ 61,023 (Apr. 8, 

2016), reh’g denied, 158 FERC ¶ 61,138 (Feb. 3, 2017). In the 

orders under review, the Commission approved an exemption 

to the minimum offer price rule in the ISO New England 

forward capacity market for a limited amount of qualifying

renewable energy. The petitioners argue that the renewable 

exemption creates unjust, unreasonable, and unduly 

discriminatory rates in violation of the Federal Power Act and 

that the Commission was arbitrary and capricious in violation 

of the Administrative Procedure Act. The petitioners also 

contend that the Commission erred by not setting a hearing on 

disputed facts. We conclude that FERC engaged in reasoned 

decision-making to find that the renewable exemption to the 

minimum offer price rule results in a just and reasonable rate. 
3

Likewise, FERC did not abuse its discretion by denying the 

petitioners’ request for a hearing. Accordingly, we deny the 

petition for review.

I. Background

This case concerns a petition for review of FERC orders 

that carve out an exception to the minimum offer price rule for 

certain qualifying renewable energy resources in the New 

England energy market. The petitioners, NextEra Energy 

Resources, LLC, NRG Power Marketing LLC, GenOn Energy 

Management, LLC, Connecticut Jet Power LLC, Devon Power 

LLC, Middletown Power LLC, Montville Power LLC, 

Norwalk Power LLC, NRG Canal LLC, Energy Curtailment 

Specialists, Inc., PSEG Power LLC, PSEG Energy Resources 

& Trade LLC, and PSEG Power Connecticut LLC 

(collectively, the “Generators”), are power generation 

companies, utility holding companies, and power distribution 

and sales companies that serve the six-state New England 

energy market. The Federal Power Act establishes the 

Commission’s authority to regulate wholesale electric rates, 

such as those determined by the results of the energy markets. 

16 U.S.C. §§ 824d-824e. 

A. The New England Forward Capacity Market

Regional entities, called “independent system 

operators” or ISOs, operate regional transmission services and

foster competition in the market by running auction markets for 

energy. See New England Power Generators Ass’n v. FERC, 

881 F.3d 202, 205-06 (D.C. Cir. 2018). ISO New England Inc. 

is the system operator for the New England region. 

ISO New England administers a forward capacity 

market for the region. It conducts the forward capacity market 
4

pursuant to rules set out in a jurisdictional tariff approved by 

FERC. The features of ISO New England’s complex forward 

capacity market have been the subject of multiple petitions for 

review. See, e.g., Public Citizen, Inc. v. FERC, 839 F.3d 1165 

(D.C. Cir. 2016); New England Power Generators Ass’n v. 

FERC, 757 F.3d 283 (D.C. Cir. 2014) (“NEPGA”); 

Connecticut Dep’t of Pub. Util. Control v. FERC, 569 F.3d 477 

(D.C. Cir. 2009); Maine Pub. Utils. Comm’n v. FERC, 520 

F.3d 464 (D.C. Cir. 2008) (per curiam), rev’d in part sub nom. 

NRG Power Mktg., LLC v. Maine Pub. Utils. Comm’n, 558 

U.S. 165 (2010).

In the forward capacity market, local utilities contract

with generators to buy quantities of energy three years ahead 

of their energy needs. With three years’ notice, demand in the

forward capacity market is able to signal that a new entrant is 

needed while there is still time to develop additional generation 

capability. 

ISO New England sets prices in the forward capacity 

market by administering a forward capacity auction. First, ISO 

New England determines the projected amount of capacity 

(“Installed Capacity Requirement”) that the region will require 

to operate reliably in three years. Next, ISO New England 

holds a descending price auction, in which generators submit 

offers to provide quantities of power at certain prices, three 

years in the future. If the bid capacity at a given price exceeds 

the Installed Capacity Requirement, ISO New England lowers 

the auction price. As the auction price decreases, generators 

offer less capacity to the auction or exit the auction altogether. 

A “clearing price” is reached at the lowest price that yields

enough supply to meet the Installed Capacity Requirement set 

by ISO New England. All generators that have successfully 

bid in the auction are paid the clearing price for the capacity 
5

they provide, even if they submitted a bid lower than the 

eventual clearing price. 

The original ISO New England tariff used a “vertical” 

demand curve, specifying a fixed demand that defined the 

capacity sought by the auction. The clearing price was reached 

at the lowest price that met the fixed demand. 

In the orders under review, ISO New England 

implemented a sloped demand curve. The sloped demand 

curve establishes a downward trending relationship between 

price and demand. Price is expressed in the chart as a multiple

of the net cost of new entry and demand is expressed as a 

reserve margin. Using the sloped demand curve, if the offered 

capacity price is decreased, it corresponds to an increased 

demand. Rather than the New England region procuring

enough capacity to meet a fixed demand as under the vertical 

demand curve, it procures enough capacity to meet the variable 

demand that is set by the supply prices offered in the auction. 

The clearing price is reached at the point of intersection of the

supply curve and the demand curve. 

The system-wide sloped demand curve was 

implemented beginning with the auction for the ninth capacity 

year (2018-2019). At the time of this petition for review, ISO 

New England had completed auctions through the eleventh 

capacity year (2020-2021). 

One of the rules in the ISO New England forward 

capacity auction is the “minimum offer price rule.” The

minimum offer price rule mitigates the potential for the 

improper exercise of market power that can occur if a 

generation resource submits capacity to the auction at a belowcost price, suppressing the clearing price. See NEPGA, 757 

F.3d at 288-92. States and some utilities participate in the 
6

market as both buyers and sellers of power, giving them the 

opportunity to exercise this type of market power. For 

example, a state-sponsored power generation resource could

submit a below-cost price offer to the auction, increasing the 

supply of lower priced power, and lowering the clearing price. 

Then, that state, as a net buyer of capacity, benefits by 

purchasing capacity at the resulting artificially low price. The 

minimum offer price rule mitigates this type of market power 

by requiring new resources to submit capacity to the auction 

above a minimum price floor. The minimum price floor is set 

at the approximate net cost of entry of a new generation 

resource. 

The present petition for review concerns an exemption 

to this rule that allows a limited amount of state-sponsored

renewable generation sources to submit price offers below the 

minimum price floor. 

B. Regulatory History and Orders Under Review

When the Commission initially approved the minimum 

offer price rule in the ISO New England tariff, it rejected 

proposed exemptions to that rule. ISO New England, Inc., 135 

FERC ¶ 61,029 (Apr. 13, 2011) (“Buyer Market Power 

Order”), reh’g denied in part, 138 FERC ¶ 61,027 (Jan. 19, 

2012). In rejecting a categorical exemption to the minimum 

offer price rule, the Commission reasoned that “uneconomic 

entry can produce unjust and unreasonable prices by artificially 

depressing capacity prices.” Buyer Market Power Order at

P 170. The Commission stated that the parties could return and 

file a complaint to seek an exemption under section 206 of the 

Federal Power Act. Id. at P 171. We upheld this order on 

review. NEPGA, 757 F.3d 283. 
7

In 2012, intervenor New England States Committee on 

Electricity, Inc. filed a complaint seeking an exemption to the 

minimum offer price rule for certain state-sponsored renewable 

resources. The proposed exemption was driven by the states’

goals to diversify their energy supply and promote the 

development of renewable energy generation. 

The Commission denied the New England States 

Committee’s complaint. New England States Comm. on Elec.

v. ISO New England Inc., 142 FERC ¶ 61,108 (Feb. 12, 2013) 

(“New England Complaint Order”), reh’g denied, 151 FERC 

¶ 61,056 (Apr. 20, 2015). The Commission explained that the 

New England States Committee did not provide any 

evidentiary support that a renewable exemption would have a 

limited price-suppression impact. New England Complaint 

Order at P 34. Also, the Commission distinguished the New 

England States Committee’s request for an exemption from one 

that it approved in the mid-Atlantic market under the PJM 

system operator. Id. at P 35. The Commission explained that

“because [the ISO New England] capacity market relies on a 

vertical demand curve while PJM’s capacity market relies on a 

sloped demand curve,” a renewable exemption would have a 

larger price impact in the ISO New England system. Id.

On April 1, 2014, ISO New England filed a package of 

reforms to its tariff under section 205 of the Federal Power Act. 

ISO-NE, Docket No. ER14-1639-000, ISO New England Inc. 

Tariff Filing (Apr. 1, 2014) (“ISO-NE Tariff”). The reforms 

implemented a new system-wide sloped demand curve to 

replace the vertical curves and included a plan for developing 

local sloped demand curves in the future. In the reformed tariff, 

ISO New England included a limited renewable exemption to 

the minimum offer price rule. 
8

The reformed tariff allows up to 200 megawatts of 

qualifying new entrant renewable capacity to be exempt from 

the minimum offer price rule beginning with the ninth capacity 

year auction. ISO-NE Tariff, pp. 129-30, 143-44. The tariff 

also included a carry-over rule, allowing any unused portion of 

the 200 megawatt renewable capacity to carry forward for two 

additional auctions (three years), up to a total cap of 600 

megawatts. Id. 

The Generators protested the renewable exemption, 

arguing that it was unjust and unreasonable because it will 

undermine competitive entry and result in significant price 

suppression. On May 30, 2014, FERC approved ISO New 

England’s reformed tariff. ISO-NE, 147 FERC ¶ 61,173 (May 

30, 2014) (“Initial Order”). In approving the reformed tariff, 

FERC rejected the Generators’ arguments regarding the 

renewable exemption. Although FERC recognized that 

“exemptions in general can lower prices, the exemption 

proposed here is coupled with a sloped demand curve that will 

limit the impact of price suppression as compared to the 

existing vertical demand curve.” Id. at P 83. FERC also 

explained that “[t]he renewable resource exemption is also tied 

to load growth . . . , so entry of renewable resources will, in 

most cases, only displace the new entry required to meet load 

growth.” Id. 

On June 30, 2014, the Generators requested a rehearing 

on FERC’s approval of the renewable exemption in the ISO 

New England tariff. The Commission denied the Generators’ 

request for rehearing on January 30, 2015. ISO-NE, 150 FERC 

¶ 61,065 (Jan. 30, 2015) (“Rehearing Order”). 

On March 30, 2015, the Generators filed a petition for 

review in this Court. After FERC sought a voluntary remand 

to permit additional consideration of certain arguments, this 
9

Court granted the request for remand on December 1, 2015. 

NextEra Energy Res., LLC v. FERC, No. 15-1070 (D.C. Cir. 

2015). 

On remand, the Commission directed ISO New 

England to revise its tariff to “provide for the inclusion of zonal 

sloped demand curves in its [Forward Capacity Market] rules,

to be implemented beginning with the eleventh Forward 

Capacity Auction.” ISO-NE, 153 FERC ¶ 61,338 at P 1 (Dec. 

28, 2015). Then, FERC reaffirmed the renewable exemption 

over the Generators’ objections. ISO-NE, 155 FERC ¶ 61,023 

(Apr. 8, 2016) (“Remand Order”), reh’g denied, 158 FERC 

¶ 61,138 (Feb. 3, 2017) (“Remand Rehearing Order”). The 

Generators petitioned for review.

Before briefing was complete, ISO New England 

decided that changing market conditions necessitated phasing 

out the renewable energy exemption. The Commission 

accepted ISO New England’s revised tariff phasing out the 

renewable energy exemption. ISO-NE, 162 FERC ¶ 61,205 at 

PP 25, 99 (Mar. 9, 2018). The revised tariff is not the subject 

of the present petition. 

II. Analysis

Under the Federal Power Act, FERC is required to 

ensure that generators provide energy at a “just and reasonable”

rate. 16 U.S.C. § 824d(a), (e). We review the Commission’s

final orders under the Administrative Procedure Act. We will 

vacate FERC decisions that are “arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law.” 5 

U.S.C. § 706(2)(A). The Commission’s factual findings will 

be upheld if supported by substantial evidence. 16 U.S.C. 

§ 825l(b). “[W]e afford great deference to the Commission in 

its rate decisions” because “‘just and reasonable’ is obviously 
10

incapable of precise judicial definition.” Morgan Stanley

Capital Grp. Inc. v. Pub. Util. Dist. No. 1 of Snohomish Cty., 

554 U.S. 527, 532 (2008).

The Generators petition for review of FERC’s orders, 

arguing that the renewable exemption creates an unjust and 

unreasonable rate and that the Commission was arbitrary and 

capricious. Additionally, the Generators contend that the 

Commission should have held a hearing on issues of disputed 

facts. 

A. Did FERC set a “just and reasonable” rate? 

The Generators’ central complaint is that statesubsidized renewable resources entering the forward capacity 

market with below-cost prices will suppress the clearing price. 

The Generators argue that any price suppression amounts to a 

subsidy for renewable resources paid for by third-party 

suppliers. 

First, we consider the Generators’ argument that the 

renewable exemption is contrary to the purpose of the forward 

capacity market. The forward capacity market uses 

“competitive bidding for future capacity contracts” to “both 

incentivize[] and account[] for new entry by more efficient 

generators, while ensuring a price both adequate to support 

reliability and fair to consumers.” Connecticut Dep’t of Pub. 

Util. Control, 569 F.3d at 480. In approving the renewable 

energy exemption, the Commission “sought to accommodate 

[state] policy decisions” to develop renewable resources “by 

allowing a limited portion of renewable resources to submit 

bids into the capacity market that are exempt from the 

minimum offer price rule.” Remand Rehearing Order at P 8. 

The Commission acknowledged that renewable “resources will 

be constructed with or without a renewables exemption.” 
11

Remand Order at P 62. If those resources “are not reflected in 

the [Forward Capacity Market], then the [Forward Capacity 

Market] may send an incorrect signal to construct new capacity 

that is not needed.” Remand Rehearing Order at PP 9, 48. This 

would lead the market to procure redundant capacity. Id. The 

Commission determined that the exemption allowed it “to send 

appropriate price signals regarding where and when new 

resources are needed.” Id. at P 9. As a result, the Commission 

concluded that “[t]he renewables exemption fulfills [its] 

statutory mandate by protecting consumers from paying for 

redundant capacity.” Remand Order at P 33. 

The Commission must “protect[] . . . consumers from 

excessive rates and charges.” Xcel Energy Servs. Inc. v. FERC, 

815 F.3d 947, 952 (D.C. Cir. 2016) (quoting Municipal Light 

Bds. of Reading & Wakefield v. FPC, 450 F.2d 1341, 1348 

(D.C. Cir. 1971)). We defer to the Commission’s 

determination that the renewable exemption effectuates the 

market’s primary purpose by sending the correct demand 

signals to new entrants and by protecting consumers from 

excessive rates. 

“[S]etting a just and reasonable rate necessarily 

‘involves a balancing of the investor and the consumer 

interests.’” Wisconsin Pub. Power Inc. v. FERC, 493 F.3d 239, 

262 (D.C. Cir. 2007) (per curiam) (quoting Federal Power 

Comm’n v. Hope Nat. Gas Co., 320 U.S. 591, 603 (1944)). The 

Commission recognized that the renewable exemption has the 

potential to cause price suppression, which is counter to the 

Generators’ interests. Nonetheless, the Commission 

determined that the renewables exemption “is consistent with 

the purpose of the” Forward Capacity Market, “namely, 

ensuring that price signals are sufficient to incent existing 

resources to stay in the capacity market, and new resources to 

enter, so that ISO [New England] meets its reliability 
12

requirements at least cost.” Remand Order at P 35. In this 

case, the Commission reasonably balanced the potential for 

limited price suppression against competing interests in 

concluding that the renewable exemption to the minimum offer 

price rule is consistent with the purpose of the forward capacity 

market.

 

Next, the Generators argue that allowing price 

suppression contravenes precedent regarding just and 

reasonable rates. According to the Generators, the 

Commission’s approval of an exemption to the minimum offer 

price rule conflicts with its earlier decision in the Buyer Market 

Power Order to reject a categorical exemption to the minimum 

offer price rule. In NEPGA, this Court upheld the 

Commission’s rejection of a categorical exemption because the 

Commission “reasonably acted to balance competing interests” 

by “mak[ing] the judgment that encouraging renewable 

energies was less important than allowing such out-of-market 

entrants to depress capacity prices.” NEPGA, 757 F.3d at 295. 

Although we deferred to FERC’s decision “to decline a 

categorical mitigation exemption,” id., we never held that the 

Commission must always weigh encouraging renewable 

energies as less important than preventing price suppression. 

In the orders under review in this case, the Commission

has performed an updated balancing of competing interests in 

the New England market. In the Buyer Market Power Order

proceeding, the Commission explained that “[w]hether to grant 

an exemption is based on each case’s unique facts” and the 

“[p]arties have not provided sufficient specificity to allow us to 

approve an appropriately narrow exemption.” Remand Order

at P 4 (quoting Buyer Market Power Order at P 171). In this 

case, the Commission considered the price suppression 

associated with the uneconomic entry of a small quantity of 

renewable resources, rather than the categorical exemption it 
13

had considered previously in the Buyer Market Power Order, 

and weighed it against state policies to promote renewable 

entry. Remand Order at PP 32-36, 39-43, 67-68; Remand 

Rehearing Order at PP 19-29, 67-68. In its evaluation, the 

Commission explained that the new sloped demand curve 

mitigates the price suppression. Id. The Commission also

considered expert testimony stating that any price suppression 

is limited by the renewable qualifying criteria, the low caps on 

the maximum amount exempted renewable capacity, and 

projected load growth and retirements. Id. The Commission 

explained why its view on the renewables exemption evolved

and why the specific circumstances of this case led it to 

conclude that the renewable exemption is just and reasonable. 

Id. Under these circumstances, the Commission’s decisions are 

distinguishable from the Buyer Market Power Order, and the 

decisions are not in conflict.

The Generators also argue that the orders under review 

are unreasonable because they are inconsistent with the 

Commission’s decision to reject a renewable exemption to the 

minimum offer price rule in the New England Complaint 

Order. However, the New England Complaint Order is also 

distinguishable from the present orders because the tariff still 

relied on a vertical demand curve which results in more

significant price suppression than a sloped demand curve. See

New England Complaint Order at PP 15, 34-35; Remand 

Rehearing Order at PP 67-68. 

Additionally, the burden of proof is different in the 

present case than in the New England Complaint Order. In the 

New England Complaint Order, the Commission rejected the 

complaint under section 206 of the Federal Power Act. 

Remand Rehearing Order at P 49. Under section 206, the 

complainant had to prove the existing rate was unjust and 

unreasonable without the renewable exemption, and then prove
14

that the proposed exemption was just and reasonable. See 

Maine v. FERC, 854 F.3d 9, 24-25 (D.C. Cir. 2017). The 

present orders under review involve a tariff filing under section 

205 of the Federal Power Act. Under section 205, FERC has 

to prove that it is establishing a just and reasonable rate. See 

id. The Commission is not required to show that the previous 

rate was unjust and unreasonable in order to demonstrate that 

the revised rate was just and reasonable under section 205. See 

id. The New England Complaint Order does not constrain the 

Commission from considering that changed circumstances 

now render the renewable exemption just and reasonable. 

Next, the Generators ask the Court to consider a Third 

Circuit decision to affirm the elimination of an exemption to 

the minimum offer price rule in the mid-Atlantic power market, 

but that holding also does not counsel a different outcome in 

this case. See New Jersey Bd. of Pub. Utils. v. FERC, 744 F.3d 

74, 100 (3d Cir. 2014) (“New Jersey”). In New Jersey, the 

Third Circuit considered a Commission order to eliminate a 

broad exemption to the minimum offer price rule that applied 

to any state-mandated resources. Id. at 95. New Jersey and 

Maryland planned to submit “thousands of megawatts of new 

capacity” below the minimum offer price floor under this 

exemption. Id. at 96. The Third Circuit affirmed the 

Commission’s fact-specific determination that there was 

“mounting evidence of risk” that price suppression would 

distort the market and send the wrong signals regarding the 

need for new entrants to the market. Id. at 100-01. Notably, in 

the same decision, the Third Circuit also affirmed a more 

limited exemption for solar and wind resources. Id. at 106-07. 

The Third Circuit concluded that “FERC is permitted to weigh 

the danger of price suppression against the counter-danger of 

over-mitigation, and determine where it wishes to strike the 

balance.” New Jersey, 744 F.3d at 109. We agree. Unlike in 

New Jersey, in this case the Commission found that the danger 
15

of price suppression was minor compared to other market 

considerations. 

FERC has, at various times, considered exemptions to the 

minimum offer price rule in other markets. See Remand Order 

at PP 32-34. In some cases, the Commission accepted an 

exemption, despite the potential for price suppression. See, 

e.g., New York Pub. Serv. Comm’n, 153 FERC ¶ 61,022 at P 10

(Oct. 9, 2015); PJM Interconnection, 135 FERC ¶ 61,022 at 

P 152 (Apr. 12, 2011). In some cases, the Commission rejected 

an exemption because of the potential for price suppression and 

market distortions. See, e.g., PJM Interconnection, 135 FERC 

¶ 61,022 at P 139; New England Complaint Order at PP 32-35; 

New York Indep. Sys. Operator, Inc., 122 FERC ¶ 61,211 at 

P 110 (Mar. 7, 2008). 

In those cases in which the Commission has considered 

exemptions to the minimum offer price rule, it considered

exemptions using a fact-specific balancing test, factoring in the 

scope of the exemption, the existence of sloped demand curves, 

and the overall impact on the market, and only accepted

exemptions that were appropriate based on the specific features 

of the market. The Commission engaged in the same type of 

analysis in the present case, and its conclusion is not contrary 

to precedent. This type of balancing requires an expert 

understanding of the market, which is well within the

Commission’s realm of expertise. We see no reason to disturb 

the Commission’s balancing just because it came out in favor 

of the renewable exemption despite the potential for price 

suppression. 

B. Did FERC engage in reasoned decision-making? 

Now that we have established that an exemption to the 

minimum offer price rule can be just and reasonable under the 
16

Federal Power Act, we will consider the Generators’ arguments 

that FERC was arbitrary and capricious in its evaluation of the 

renewable exemption.

First, the Generators argue that FERC acted 

unreasonably because it failed to quantify the price suppression 

resulting from the exemption. We defer to the Commission’s 

reasoning when it relies on substantial evidence to make a 

predictive judgment in an area in which it has expertise, such 

as in the power markets. Wisconsin, 493 F.3d at 260. The 

Generators would like the Court to either require a quantitative 

assessment of price suppression or for FERC to explain 

“specifically why it could not have done so.” Sierra Club v. 

FERC, 867 F.3d 1357, 1374 (D.C. Cir. 2017). In Sierra Club, 

we required a quantitative assessment of greenhouse gas 

emissions, because such an assessment was necessary to 

forecast the environmental impact of the decision under 

review. Id. Price suppression is not a scientific determination, 

but rather an economic construct. We permit the Commission 

to base its market predictions on “basic economic theory, given 

that it explained and applied the relevant economic principles 

in a reasonable manner.” Sacramento Mun. Util. Dist. v. 

FERC, 616 F.3d 520, 531 (D.C. Cir. 2010) (per curiam); see 

also South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 65 

(D.C. Cir. 2014) (per curiam). 

The Commission considered the contradictory expert 

testimony that the Generators presented that described and 

quantified potentially severe price suppression. See Remand 

Order at PP 37-44. The Commission credited competing 

expert testimony that predicted the price impact was more 

limited. Id. at PP 40-41. The Commission explained that the

experts’ conclusions differed because they disagreed on the 

predicted steepness of the supply curve, and it rejected the 

Generators’ experts’ assumptions on that topic. Id. It is well 
17

within the Commission’s expertise to resolve conflicting expert 

testimony and make a judgment on which best predicts the 

scope and magnitude of the price suppression. The 

Commission is not required to rely only on quantitative 

predictions. Accordingly, we conclude that FERC relied on 

substantial evidence in determining that the price suppression

from the renewable exemption will be minimal.

Second, the Generators argue that FERC acted 

unreasonably by relying on the sloped demand curve to justify 

its decision. The Generators argue that even though the sloped 

demand curve mitigates the price suppression compared to a 

vertical demand curve, it still results in significant price 

suppression and an unjust rate. 

The Generators’ objection revolves around the 

determination of the point where the supply curve intersects the 

demand curve, which sets the clearing price. When below-cost 

energy is added to the market, it shifts the supply curve to the 

right, so that it intersects the demand curve at a lower clearing 

price. Remand Rehearing Order at P 21. The Generators 

assert that the supply curve is steep where it intersects the 

demand curve. Because it is steep, small rightward shifts to the

supply curve caused by the introduction of a limited amount of 

below-cost resources result in an intersection with the demand 

curve at a much lower clearing price. See id. at P 22. The 

Commission agrees that the steepness of the supply curve 

influences the magnitude of the price suppression. However, 

the Commission credited the testimony of an expert witness 

that explained that the supply curves are likely to be flatter than 

the supply curves offered by the Generators’ experts. Remand 

Order at P 41; Remand Rehearing Order at P 25. 

Likewise, the Generators also argue the Commission 

acted unreasonably in accepting ISO New England’s revised 
18

demand curves and the addition of local sloped demand curves 

upon remand. Generators argue that the new demand curves 

are steeper at the point that they intersect the supply curve than 

the previous demand curves, resulting in greater price 

suppression. The Commission determined that the steepness in 

the new demand curves is mitigated because actual supply 

curves have been flatter than Generators predicted, and, if the 

performance of the demand curves changes over time, there are 

proceedings to review new curves that can address any issues. 

See Remand Order at P 44; Remand Rehearing Order at P 37. 

The Generators object to the inclusion of data from the ninth 

and tenth capacity year in the Commission’s reasoning. 

However, the record was still open at the time the Commission 

considered the Remand Order and the Commission may fairly 

consider the market’s actual performance.1

Again, we defer to the Commission’s resolution of 

conflicting expert testimony regarding the relationship 

between the intersection between the supply and demand 

 1 It may appear that the Commission selectively relied on evidence 

of the performance of the supply curves during the ninth and tenth 

capacity year while it simultaneously refused to consider evidence 

that the predicted load growth was not materializing. However, as 

the Commission acknowledged, load growth was lower than 

anticipated during the ninth and tenth capacity years. Remand 

Rehearing Order at P 72. But, the Commission relied on retirements 

in addition to load growth to offset the renewables exemption. The 

Commission considered evidence that the actual retirements in those 

years offset the small amount of exempted renewable energy that 

actually cleared the market even absent load growth. Id. at P 73. The 

Commission further acknowledged that ISO New England affirmed 

it was committed to revisiting the cap in future years if the load 

growth and retirements failed to offset the entry of exempted 

renewables into the market. Id. at P 74. 
19

curves and the clearing price. The Commission reasonably 

determined that price suppression would be minimal because 

sloped demand curves mitigate price suppression.

Third, the Generators argue that FERC acted 

unreasonably by relying on anticipated load growth and 

retirements to mitigate price suppression. The Commission 

relied on expert testimony predicting that existing generators 

would leave the market and the demand for capacity would 

grow. Therefore, the small amount of renewable resources 

would fill some of this demand while prices remained stable. 

See Remand Order at P 53; Remand Rehearing Order at P 20. 

The Generators counter that load growth failed to occur 

as the Commission anticipated. “[R]easoned decisionmaking 

does not require complete prescience.” Florida Gas 

Transmission Co. v. FERC, 604 F.3d 636, 645 (D.C. Cir. 

2010). The Commission relied on the expert predictions that 

were available at the time of its decision, and we defer to its 

use of these predictions.

The Generators also argue that the Commission did not

rationally tie the magnitude of the exemption to any particular 

prediction of load growth or retirement. However, FERC 

explained that the 200 megawatt exemption was based on the 

best estimate of load growth, which was “estimated at 189 MW 

annually, plus an adjustment for the reserve margin required to 

meet the installed capacity requirement.” Initial Order at P 83; 

Rehearing Order at P 22. The Commission also acknowledged 

load growth could be more or less than ISO New England 

anticipated, but ISO New England committed to “revisit[ing] 

the cap on the . . . exemption in the future, should the entry of 

[renewable resources] exceed load growth.” Rehearing Order 

at P 22. The Commission acted reasonably in tying the 200 

megawatt exemption caps to load growth estimates.
20

With respect to retirements, the Generators argue that 

the retirement rationale was inappropriately raised on remand, 

that uneconomic entry will continue after retirements complete, 

and that its experts found price suppression will occur even

with retirements. The Commission noted that ISO New 

England had previously predicted 6,500 megawatts of 

retirements by 2020, which is a substantial portion of the 

35,000 megawatt market. Remand Order at P 53; Remand 

Rehearing Order at P 73. More recently, ISO New England 

“estimated that by 2020, resources representing about 30 

percent of regional capacity have committed to cease operation 

or are at risk of retirement.” Remand Order at P 53. The 

Commission observed that the predicted retirements were far 

in excess of the 600 megawatt carry-forward cap, and 

concluded that the exempted renewable energy would only 

make a small impact in replacing retiring resources. Id. Even

with retirements, the Commission acknowledged the potential 

for minor price suppression. See Remand Rehearing Order at

P 20. But the Commission is not required to protect against all 

price suppression. The Commission acted reasonably in 

concluding that retirements would help mitigate any price 

suppression.

Accordingly, we defer to the Commission’s conclusion 

that the renewable energy exemption had only a limited 

potential for price suppression because of the implementation 

of the sloped demand curve, the prediction of a flatter supply 

curve, and predicted load growth and retirements. Therefore, 

we deny the Generators’ petition for review.

C. The Generators’ request for a hearing

Lastly, the Generators argue that the Commission

should have settled issues of disputed fact regarding price 
21

suppression, load growth, and retirements at a hearing. The 

Commission’s decision on whether to hold a hearing is 

reviewed for abuse of discretion. Louisiana Pub. Serv. 

Comm’n v. FERC, 184 F.3d 892, 895 (D.C. Cir. 1999). “In 

general, FERC must hold an evidentiary hearing only when a 

genuine issue of material fact exists, and even then, FERC need 

not conduct such a hearing if [the disputed issues] may be 

adequately resolved on the written record.” Minisink Residents 

for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 114 (D.C. Cir. 

2014) (quoting Cajun Elec. Power Coop., Inc. v. FERC, 28 

F.3d 173, 177 (D.C. Cir. 1994) (per curiam)). 

In this case, the Commission decided that the material 

facts could be resolved on the written record. Remand 

Rehearing Order at PP 99-100. The extensive written record

contained expert testimony and analysis regarding the market 

effects of the renewable exemption, the development of the 

sloped demand curve, and predictions for load growth and 

retirements. See id. Accordingly, the Commission did not 

abuse its discretion by relying on the written record to resolve 

disputes of material fact on these issues. 

III. Conclusion

For the reasons set forth above, the Generators’ petition 

for review is denied.