United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 27, 2022 Decided March 22, 2022

No. 20-1422

LSP TRANSMISSION HOLDINGS II, LLC,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC

COMPANY AND AVANGRID NETWORKS, INC.,

INTERVENORS

On Petition for Review of Orders

of the Federal Energy Regulatory Commission

Michael R. Engleman argued the cause for petitioner. With

him on the briefs were Robert C. Fallon and Christina Switzer.

Amber L. Stone argued the cause for intervenor

Massachusetts Municipal Wholesale Electric Company in

support of petitioner. With her on the brief was Scott H.

Strauss.

Carol J. Banta, Senior Attorney, Federal EnergyRegulatory

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

brief were Matthew R. Christiansen, General Counsel, and
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Robert H. Solomon, Solicitor.

Before: ROGERS and PILLARD, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH.

RANDOLPH, Senior Circuit Judge: LSP Transmission

Holdings II, LLC, is an independent electric transmission

developer. It regularly bids on proposals to build transmission

projects throughout the United States. LSP brings this petition

for judicial review of a decision of the Federal Energy

Regulatory Commission concerning ISO New England’s1

compliance with Commission Order No. 1000.

Among other things, Order No. 1000 required “the removal

from Commission-jurisdictional tariffs and agreements of

provisions that grant a federal right of first refusal to construct

transmission facilities selected in a regional transmission plan

for purposes of cost allocation.” See Transmission Planning and

Cost Allocation by Transmission Owning and Operating Public

Utilities, 136 FERC ¶ 61,051, P. 225 (2011). Instead of a right

offirst refusal,theCommission directed incumbent transmission

providers to engage in competitive selection of

developers—which meant describing the project, soliciting

proposals, and evaluating bids. See id.; see also S.C. Pub. Serv.

Auth. v. FERC, 762 F.3d 41, 72–73 & n.6 (D.C. Cir. 2014). But

the Commission recognized an exception central to this dispute:

ISO New England is a private, non-profit regional transmission

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organization that administers New England’s energy markets and

operates “the region’s bulk power transmission system.” Braintree

Elec. Light Dep’t v. FERC, 550 F.3d 6, 9 (D.C. Cir. 2008) (internal

quotation marks omitted).
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if the time needed to solicit and conduct competitive bidding

would delay the project and thereby threaten system

“reliability,” then competitive bidding would not be required.

136 FERC ¶ 61,051, P. 329. 

In approving ISO New England’s tariff revisions in 2013,

the Commission reaffirmed “that in certain instances time

constraints may not allow for the open solicitation of

reliability-related transmission projects without risking

reliability to the system.” ISO New Eng. Inc., 143 FERC

¶ 61,150, P. 235 (2013) [hereinafter Compliance Order]. The

Commission listed criteria to govern whether a right of first

refusal applied to reliability projects, one of which was that “the

reliability project must be needed in three years or less to solve

reliability criteria violations.” Id. P. 236. The three-year limit

is less than what ISO New England sought—it wanted to exempt

projects needed within five years. Id. PP. 220, 237. The

Commission rejected that proposal, concluding that such an

extended time-frame for designating a project as an urgent

system-reliability need “would effectively preclude the benefits

of competition in selecting the more efficient or cost-effective

projects.” Id.

By 2019, the Commission had become concerned that ISO

New England and other utilities were acting inconsistently with

the competitive selection requirements of Order No. 1000 and

later orders. See ISO New Eng. Inc., 169 FERC ¶ 61,054 (2019)

[hereinafter Show Cause Order]. The Commission, invoking

Section 206 of the Federal Power Act (“FPA”), 16 U.S.C.

§ 824e, directed ISO New England to:

(1) demonstrate how it is complying with the

immediate need reliability project criteria; (2)

demonstrate that the provisions in its tariff, as

implemented, containing certain exemptions to the
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requirements of Order No. 1000 for immediate need

reliability projects remain just and reasonable; and (3)

consider additional conditions orrestrictions on the use

of the exemption for immediate need reliability

projects to appropriately balance the need to promote

competition for transmission development and avoid

delays that could endanger reliability.

Id. P. 1. 

Particularlytroubling to theCommission was the number of

ISO New England projects with estimated “need-by dates”

occurring within the three-year window, but before the projects

would become operational. Id. P. 8. Need-by dates are

estimated dates when a project would be needed to guarantee

system reliability. In-service dates are the projected dates when

a completed project would be fully operational. ISO New

England explained that a need-by date can predate an in-service

date because ISO New England uses “a more conservative set of

assumptions” about when a project will be necessary to prevent

reliability shortfalls.

LSP intervened in the § 206 proceeding. In its comments,

LSP emphasized that since 2016, ISO New England had

exempted from competition “virtuallyevery . . . reliability need”

project—that is, thirty of thirty-one such projects. J.A. 303.

LSP urged theCommission to eliminate or limit the competition

exception for system reliability projects.

The Commission found “insufficient evidence” that ISO

New England was incorrectlyimplementingOrder No. 1000 and

its progeny. ISO New Eng., 171 FERC ¶ 61,211, PP. 1, 55

(2020) [hereinafter Termination Order]. The Commission saw

no error in ISO New England’s use or calculation of need-by

dates, which the Commission thought provided for
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contingencies and ensured reliable service. Id. PP. 56–59.

There was no dispute that ISO New England followed the

Compliance Order. Id. P. 60. For those same reasons, the

Commission denied LSP’s rehearing petition. See ISO New

Eng., 172 FERC ¶ 61,293 (2020)[hereinafter Rehearing Order].

I.

The Commission seeks to convince us that LSP does not

have standing and that even if it does, the Commission’s

decision is immune from judicial examination.

A.

As to standing, the Commission asks how LSP could have

suffered an Article III injury when the Commission “made no

changes to the existing, previously-approved planning criteria.”

The law has long been clear: to establish injury, LSP had only

to show that it “was ready, willing and able to perform” and that

Order No. 1000 and the tariff “deprived the company of the

opportunity to compete” for the work. O’Donnell Constr. Co.

v. District of Columbia, 963 F.2d 420, 423 (D.C. Cir. 1992);see

Carney v. Adams, 141 S. Ct. 493, 499–500, 503 (2020); Ne. Fla.

Chapter of Associated Gen. Contractors v. City of Jacksonville,

508 U.S. 656, 666 (1993). LSP met these requirements. It

demonstrated its readiness when its subsidiary bid on the only

one of thirty-one recent reliability projects open to competitive

bidding. Yet because oftheCommission’s criteria, therewas no

competitive bidding for the thirty other transmission projects.

LSP accordingly has suffered an Article III injury.

LSP Transmission Holdings, LLC v. FERC, 700 F. App’x

1, 2 (D.C. Cir. 2017) (per curiam), has no bearing on this case. 

We held that LSP lacked standing to claim that a utility

wrongfully excluded it “from competition based on state and
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local laws.” Id. We so held because LSP failed to identify a

“specific project that [the utility] has approved for regional cost

allocation in a state whose law gives an incumbent a right of

first refusal . . ..” Id. The situation here is quite different.

There can be no doubting LSP’s assertion that it has been denied

the ability to bid on the thirty identified projects as a result of

ISO New England’s implementation of the Compliance Order.

B.

TheCommission’s argument that itsruling is immune from

judicial questioning rests on the Supreme Court’s interpretation

of the Administrative Procedure Act, 5 U.S.C. § 701(a)(2), in

Heckler v. Chaney, 470 U.S. 821 (1985). Its action here is

reviewable. The Commission invoked § 206 of the Federal

Power Act, 16 U.S.C. § 824e, and issued a show cause order

under 18 C.F.R. § 385.209(a). Show Cause Order P. 1 & n.2.

Proceedings under FPA § 206 result in “substantive adjudicative

decisions.” Pub. Citizen, Inc. v. FERC, 7 F.4th 1177, 1196 n.4

(D.C. Cir. 2021). Compare 16 U.S.C. § 824e(a), with 5 U.S.C.

§ 554(c). The Commission published notice of the proceeding

in the Federal Register “with interventions due within 21 days

of publication.” Termination Order P. 5. Multiple

organizations, including LSP, timely moved to intervene and

filed comments. Id. PP. 5–8. The Commission considered and

addressed these comments in concluding that no further action

was needed. Id. PP. 12–63. 

As for the order itself, the Commission resolved the matter

on the merits. See Citizensto Pres. Overton Park, Inc. v. Volpe,

401 U.S. 402, 410 (1971). It explained that further action was

unnecessary because ISO New England had complied with

Order No. 1000 and its Tariff. Termination Order PP. 55–60.

The order terminating the proceeding is replete with invocations

of agency precedent and reasons for retaining the exemption
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criteria. Id. 

The Commission’s ruling thus bears all the indicia of a

substantive decision produced after a contested proceeding

involving not only ISO New England but also numerous

intervenors. It is therefore subject to judicial review.

II.

On themerits,LSP’s main argument is that theCommission

should have required ISO New England to use in-service dates

rather than need-by dates to determine whether a reliability

project would be exempt from Order No. 1000’s competitiveselection requirement. LSP claims that using need-by dates has

led to nearly all reliability projects being exempt from

competition, even though the projects did not come on line for

years after their need-by dates had passed—a situation LSP

describes as the exception swallowing the rule.

The Commission recognized that need-by dates “often

occur” well before in-service dates. Rehearing Order P. 31. 

And it addressed the contention that need-by dates are inferior

to in-service dates. Relying on a prior decision, theCommission

explained why “it is proper to use the date a reliability need

must be addressed rather than the expected in-service date of the

project chosen . . ..” Id. P. 29; see PJM Interconnection, L.L.C.,

156 FERC ¶ 61,030, P. 24 (2016), vacated on other grounds by

Old Dominion Elec. Coop. v. FERC, 898 F.3d 1254 (D.C. Cir.

2018).

An agency “need not repeat itself incessantly” and can

dispose of claims by relying upon prior actions provided the

agency’s earlier reasoning has not been rendered invalid. 

Bechtel v. FCC, 10 F.3d 875, 878 (D.C. Cir. 1993); see also

Lichoulas v. FERC, 606 F.3d 769, 777 (D.C. Cir. 2010). Using
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need-by dates rather than expected in-service dates to decide if

a project falls within the Compliance Order’s needed-withinthree-years-or-less requirement, the Commission said,

accomplishes the purpose of getting urgent projects fulfilled

expeditiously. Rehearing Order P. 30. Most concerning to the

Commission was that measuring by in-service dates could delay

urgently needed projects that would take more than three years

to complete because such projects would be subject to the

competitive-bidding process. Id. In explaining the foundation

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for using need-by dates, the Commission adequately addressed

LSP’s objection.

We see nothing irrational in the Commission’s response to

LSP’s general criticism of ISO New England’s use of more

conservative assumptions regarding its system capacity and

future management. Id. P. 28. The Commission explained that

ISO New England’s methodology—and specifically its use of

need-by dates—helps ensure “reliable service to load under a

wide range of operating conditions . . ..” Termination Order P.

58. And the Commission noted that “the use of more

conservative study assumptions in transmission planning is

consistent with applicable North American Electric Reliability

Corporation (NERC) Reliability Standards.” Rehearing Order

P. 28.

Also, according to LSP, the Commission improperly

“Using the anticipated in-service date instead of the need-by 2

date could lead to the perverse result where the immediate need

reliability project exemption would apply to a project needed in three

years if it could be placed in service within three years, but that the

more time-consuming competitive proposal window process would be

required to address a reliability solution needed in one year if it could

not be placed in service within three years. Use of the needed by date

prevents such an inappropriate outcome.” Rehearing Order P. 30.
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departed from the precedent set in Order No.1000 and later

orders. LSP’s evidence of this is that the overwhelming

majority of ISO New England’s reliability projects fell within

the exception from competition. In response, the Commission

reaffirmed the decisional process for designating a project as an

urgent reliability need—finding that the “criteria appropriately

balance reliability and competition.” Rehearing Order P. 23. 

The Commission noted that “the frequency” of the exception’s

invocation “does not alone provide sufficient evidence that the

Tariff is unjust and unreasonable.” Id. The Commission

pointed to a recent instance where a reliability-project

solicitation was conducted competitively. Id. P. 24. And the

Commission determined that ISO New England had correctly

applied the Compliance Order’s criteria. Id.

LSP frames its argument in terms of requiring the

Commission to follow its precedents. But LSP urges the

Commission to abandon its current rules because far too many

projects are winding up exempt from competition. LSP may

have a point. If a theory does not work in practice, there is

usually something wrong with the theory. See JOHN STUART

MILL, AUTOBIOGRAPHY 79 (J. Bennett ed., 2017) (1873). Yet

LSP did not challenge the Commission’s finding that ISO New

England had not violated theCommission’s tariff. And although

the number of reliability projects so far exempted from

competitive bidding exceeded those open to competition, the

appropriate balance struck—between competitive procurement

and quick redress of reliability needs—is the sort of policy

judgment left to the Commission. See Fresno Mobile Radio,

Inc. v. FCC, 165 F.3d 965, 971 (D.C. Cir. 1999).

The petition for judicial review is denied.