United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2024 Decided October 4, 2024

No. 23-1094

NEXTERA ENERGY RESOURCES, LLC AND NEXTERA ENERGY 

SEABROOK, LLC,

PETITIONERS

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

AVANGRID, INC. AND NECEC TRANSMISSION LLC,

INTERVENORS

Consolidated with No. 23-1215

On Petitions 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 Matthew E. Price, Arjun Ramamurti, 

and Anand Viswanathan. 

Robert M. Kennedy, Senior Attorney, Federal Energy 

Regulatory Commission, argued the cause for respondent. 
2

With him on the brief were Matthew R. Christiansen, General 

Counsel, and Robert H. Solomon, Solicitor.

Eric J. Konopka argued the cause for intervenors NECEC 

Transmission LLC and Avangrid, Inc. in support of 

respondent. With him on the brief were Richard P. Bress, 

David L. Schwartz, and James B. Blackburn IV.

Before: MILLETT, KATSAS, and RAO, Circuit Judges.

Opinion for the Court filed by Circuit Judge KATSAS.

Dissenting opinion filed by Circuit Judge RAO.

KATSAS, Circuit Judge: The Federal Energy Regulatory 

Commission may regulate the transmission, but not the 

generation, of electricity. In this case, FERC required a

generator to upgrade its circuit breaker so that another power 

source could safely connect to the regional transmission grid. 

The Commission ordered the new power source to compensate 

the generator for the direct costs of the upgrade, but not for its

indirect costs. We hold that the agency had statutory authority 

to require the upgrade, correctly interpreted the governing tariff 

and contract to require the upgrade, and permissibly denied 

compensation for its indirect costs.

I

A

Supplying electricity to consumers requires three principal 

kinds of facilities—generators produce the electricity, 

transmission facilities move it over long distances, and 

distribution facilities move it over short distances to individual 

customers. Detroit Edison Co. v. FERC, 334 F.3d 48, 49 (D.C. 

Cir. 2003). The transmission market has high barriers to entry, 
3

so transmission owners typically “enjoy a natural monopoly.” 

Transmission Access Pol’y Study Grp. v. FERC, 225 F.3d 667, 

683 (D.C. Cir. 2000) (Transmission Access).

The Federal Power Act allows FERC to regulate some, but 

not all, types of these facilities. Section 201(b) empowers the 

Commission to regulate the “transmission” and wholesale 

“sale” of electricity in interstate commerce, as well as 

“facilities” for such transmission or sale. 16 U.S.C. 

§ 824(b)(1). But it also states that the agency, except as 

specifically provided, does not have jurisdiction over facilities 

used for the “generation,” intrastate transmission, or local 

distribution of electricity. Id.

The modern structure of the electricity market reflects 

decades of changing technology and regulations. “In the bad 

old days,” power grids were run by “vertically integrated 

monopolies” that owned generation, transmission, and 

distribution facilities. Midwest ISO Transmission Owners v. 

FERC, 373 F.3d 1361, 1363 (D.C. Cir. 2004). Utilities sold 

these services in bundled packages to customers in limited 

geographic areas. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 

607, 610 (D.C. Cir. 2001). Eventually, technological advances 

made it easier to generate electricity and transmit it over long 

distances. See Transmission Access, 225 F.3d at 681. But 

transmission owners exploited their monopoly power to deny 

competing sellers access to their facilities. See id. at 682–84. 

This practice resulted in artificially high electricity prices for 

consumers. Id. at 682.

In 1996, FERC responded with a regulation known as 

Order No. 888, which required transmission owners to give 

other generators equal access to interstate transmission

facilities. Promoting Wholesale Competition Through Open

Access Non-Discriminatory Transmission Services by Public
4

Utilities; Recovery of Stranded Costs by Public Utilities and

Transmitting Utilities, 61 Fed. Reg. 21,540 (May 10, 1996). 

Among other things, the Commission required transmission 

owners to “file open access nondiscriminatory tariffs” for 

wholesale transmission service, thus effectively “unbundling” 

sale of the power itself from sale of the transmission service. 

See Detroit Edison, 334 F.3d at 50. In Transmission Access, 

this Court upheld Order No. 888 “in nearly all respects.” 225 

F.3d at 681.

Implementation of Order No. 888 proved challenging. 

“[E]very time a new generator of electricity asked to use a 

transmission network owned by another—to interconnect the 

two entities—disputes between the generator and the owner of 

the transmission grid would arise,” thus consistently delaying 

market entry by new generators. ESI Energy, LLC v. FERC, 

892 F.3d 321, 324 (D.C. Cir. 2018). FERC responded with 

Order No. 2003, Standardization of Generator Interconnection 

Agreements and Procedures, 68 Fed. Reg. 49,846 (Aug. 19, 

2003), which “require[d] all transmission facilities to adopt a 

standard agreement for interconnecting with generators larger 

than 20 megawatts.” Nat’l Ass’n of Regul. Util. Comm’rs v.

FERC, 475 F.3d 1277, 1279 (D.C. Cir. 2007) (Utility 

Commissioners). These agreements are known as Large 

Generator Interconnection Agreements (LGIAs). Order No. 

2003 prescribed a standard LGIA. See Pac. Gas & Elec. Co.

v. FERC, 533 F.3d 820, 823 (D.C. Cir. 2008). In Utility 

Commissioners, this Court upheld Order No. 2003—including 

its imposition of the standard LGIA—against various facial 

challenges under section 201(b). See 475 F.3d at 1279–80.

One final feature of the grid bears mention. To facilitate 

coordination among different transmission owners, FERC has 

encouraged them to establish Independent System Operators, 

which operate transmission facilities on behalf of the individual 
5

owners. See Morgan Stanley Cap. Grp. v. Pub. Util. Dist. No. 

1, 554 U.S. 527, 536–37 (2008). In the six New England states, 

ISO New England operates the regional power grid. As 

required by section 205(c) of the Federal Power Act, 16 U.S.C. 

§ 824d(c), it has filed a systemwide tariff setting rates and other 

terms of service. See Constellation Mystic Power, LLC v. 

FERC, 45 F.4th 1028, 1036 (D.C. Cir. 2022).

B

This case involves a dispute between NextEra Energy 

Resources, LLC, which transmits electricity through the New 

England grid, and Avangrid, Inc., which wishes to do so. It 

turns on various provisions in the governing tariff and LGIA.

NextEra owns Seabrook Station, a nuclear power-plant

located in Seabrook, New Hampshire. Electricity flows from 

the plant through a circuit breaker, which serves to interrupt 

fault currents—abnormally high currents caused, for example, 

by short circuits. When a fault occurs, the circuit breaker 

temporarily cuts Seabrook off from the grid. The breaker thus 

protects both Seabrook Station, which could be damaged by a 

high-voltage backflow of electricity, as well as the broader grid 

itself. As the amount of power flowing though the grid 

increases, so does the necessary capacity of the breaker.

As required by Order No. 2003, NextEra and ISO New 

England have entered into a Large Generator Interconnection 

Agreement governing the terms of Seabrook’s connection to 

the regional transmission grid. Article 9.7.5 of the LGIA 

requires Seabrook to “install” and “maintain” circuit breakers 

in accordance with “Good Utility Practice.” J.A. 326. The 

LGIA defines “Good Utility Practice” to include practices that 

could reasonably be expected to safely and reliably accomplish 

a desired result at reasonable cost. Id. at 283.
6

In 2017, Massachusetts engaged Avangrid to develop its 

New England Clean Energy Connect (NECEC) project. The 

project will supply Massachusetts utilities with power

generated by hydroelectric facilities in Quebec. As part of the 

project, Avangrid and NECEC Transmission LLC have built a 

transmission line running from the Canadian border to 

Lewiston, Maine, where the power will enter the regional grid.

The ISO New England tariff sets forth rules governing the 

connection of new power sources to the grid. For proposed 

elective projects such as NECEC, the tariff requires ISO New 

England to conduct a study before the connection may take 

place. If the study reveals that interconnection would have a 

“significant adverse effect” on the reliability of other 

transmission owners’ or customers’ facilities, the project “shall 

not proceed” unless its sponsor “takes such action or constructs

at its expense such facilities as the ISO determines to be 

reasonably necessary to avoid such adverse effect.” J.A. 724.

Avangrid sought to connect the NECEC power line to the 

regional grid. After performing the requisite study, ISO New 

England determined that, with that connection, Seabrook could 

not safely remain connected to the grid unless it upgraded its 

circuit breaker. The breaker is currently operating at 99.6% of 

its capacity. If further power flowed from the NECEC line, the 

breaker would operate at 101.2% of its capacity. In other 

words, the size of a potential fault current could overwhelm the 

breaker and cause it to fail.

Seabrook and Avangrid disputed whether or how the 

circuit breaker should be upgraded. The parties agreed on 

several points: Avangrid cannot connect to the grid unless and 

until Seabrook upgrades the breaker; Avangrid must pay the 

direct costs of any upgrade; and any upgrade should take place

while the plant refuels during a planned outage. But Seabrook 
7

and Avangrid disagreed on whether the upgrade would require 

extending the plant’s outage time. They disagreed on whether 

Avangrid must compensate Seabrook for indirect costs such as

its legal costs and any lost profits on energy sales. Most 

significantly, they disagreed on whether Seabrook must 

upgrade the breaker even if Avangrid does not provide the 

degree of compensation that Seabrook has demanded.

C

Both parties asked FERC to resolve the dispute. Seabrook 

petitioned for a declaration that it was not required to upgrade

the circuit breaker or, alternatively, that it was entitled to a full 

recovery of its direct and indirect costs. Soon after, Avangrid 

filed an administrative complaint seeking to prevent Seabrook 

from blocking the interconnection.

FERC ruled primarily for Avangrid. NextEra Energy 

Seabrook, LLC, 182 FERC ¶ 61,044 (2023). It concluded that 

because the circuit breaker was part of the Seabrook generation 

facility, tariff provisions requiring transmission network 

upgrades did not apply. Id. PP 75–76. But the Commission 

ruled that Good Utility Practice, as required by the LGIA, 

compelled Seabrook to upgrade the breaker. Id. PP 79–88. 

Finally, FERC concluded that Avangrid was not required to 

reimburse Seabrook for indirect costs of the upgrade such as 

any lost profits or legal expenses. Id. PP 100–06.

On rehearing, Seabrook argued that because the circuit 

breaker was part of its generation system and not part of the 

interstate transmission system, FERC lacked statutory 

authority to require the upgrade. The Commission rejected that 

contention based on this Court’s decision in Utility 

Commissioners. NextEra Energy Seabrook, LLC, 183 FERC 

¶ 61,196, PP 17–19 & n.39 (2023). The agency also reaffirmed 
8

its rulings regarding the terms of the LGIA, id. PP 20–26, and 

the extent of required compensation, id. PP 36–46.

Seabrook has petitioned for review of these orders. We 

have jurisdiction under 16 U.S.C. § 825l(b).

II

We review FERC orders under the Administrative 

Procedure Act, which requires us to consider whether agency 

decisions are “arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). 

This standard of review is deferential to the agency; we must 

uphold decisions that are “reasonable and reasonably 

explained.” See FCC v. Prometheus Radio Project, 141 S. Ct. 

1150, 1158 (2021).

In the past, we have deferred to FERC’s reasonable 

interpretation of ambiguous tariffs and contracts within its 

jurisdiction. See Wabash Valley Power Ass’n v. FERC, 45 

F.4th 115, 119 (D.C. Cir. 2022); Long Island Power Auth. v. 

FERC, 27 F.4th 705, 716 (D.C. Cir. 2022). We have described 

these deference principles as “Chevron-like” in nature. PSEG 

Energy Resources & Trade LLC v. FERC, 665 F.3d 203, 208 

(D.C. Cir. 2011); see Chevron U.S.A. Inc. v. NRDC, 467 U.S. 

837, 843–44 (1984). This raises a question whether the 

principles survive the overruling of Chevron in Loper Bright 

Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). But we need 

not consider deference here because FERC’s interpretation of 

the disputed provisions of the LGIA and the tariff are in fact 

correct. See FERC v. Elec. Power Supply Ass’n, 577 U.S. 260, 

277 n.5 (2016).
9

A

The Federal Power Act states that FERC generally “shall 

not have jurisdiction” over “facilities used for the generation of 

electric energy.” 16 U.S.C. § 824(b)(1). In its initial order, 

FERC concluded that the “location and purpose” of the 

Seabrook circuit breaker, which serves to protect the plant from 

fault currents, “indicate that the breaker is a generator 

component” not subject to the network upgrades required for 

transmission facilities. NextEra Energy Seabrook, 182 FERC 

¶ 61,044, P 76. Based on that ruling, Seabrook argues that 

FERC lacks statutory authority to require replacement of the

circuit breaker. On rehearing, FERC asserted the power “to 

enforce Seabrook’s obligations with respect to its own facilities 

under the Seabrook LGIA.” NextEra Energy Seabrook, 183

FERC ¶ 61,196, P 19. Under binding precedents, FERC had 

this authority.

To police the jurisdictional lines drawn by section 201(b), 

we ask three questions: first, whether the action at issue directly 

affects facilities or transactions that FERC may regulate; 

second, whether FERC has impermissibly regulated matters 

outside its jurisdiction; and third, whether the contested 

assertion of authority is consistent with the statute’s core 

purposes. See, e.g., Elec. Power Supply Ass’n, 577 U.S. at

276–77; Nat’l Ass’n of Regul. Util. Comm’rs v. FERC, 964 

F.3d 1177, 1185–86 (D.C. Cir. 2020).

All three considerations support FERC’s authority here. 

First, the upgrade directly affects the transmission of electricity

in interstate commerce, an area where FERC may regulate. As 

explained above, Seabrook’s barely-good-enough circuit 

breaker currently prevents other power sources from

connecting to the interstate grid without posing substantial

risks to Seabrook. If FERC could not order an upgrade in those 
10

circumstances, incumbent generators could unilaterally 

prevent competing sellers from joining the grid, which would 

directly—and substantially—limit how much electricity could 

be transmitted. And if FERC could not require generators to 

install circuit breakers at all, the entire grid would be left 

vulnerable to widespread outages from fault currents.

Second, FERC has not impermissibly regulated Seabrook 

as a generator. Section 201(b) prohibits FERC from regulating 

generators “except as specifically provided,” yet it permits 

FERC to regulate the interstate “transmission” of electricity. 

16 U.S.C. § 824(b). Construing these provisions, we held in 

Transmission Access that “FERC may exercise jurisdiction

over generation facilities to the extent necessary to regulate 

interstate transmission.” 225 F.3d at 718. Likewise, in Utility 

Commissioners, we explained that FERC may require an 

interconnected generator to make “physical changes” to its own 

facilities if the changes “bear a close enough relation to 

FERC’s exercise of jurisdiction over jurisdictional 

transactions.” 475 F.3d at 1282.

Seabrook objects that its circuit breaker serves to protect 

its own generator—not interstate transmission facilities. But at 

the point of interconnection, the safety and reliability of 

generators and transmission facilities are closely related. And 

we have already held that FERC, in imposing the standard 

LGIA, permissibly “exercised its jurisdiction over the terms

of” relationships between generators and transmission owners

“with respect to electricity flowing” between the two kinds of 

facilities at the point of interconnection. See Utility 

Commissioners, 475 F.3d at 1280. In the order under review, 

FERC merely enforced a provision of the standard LGIA. And 

Seabrook gives us no reason to suppose that FERC’s authority 

to require an effective circuit breaker at the point of 

interconnection is any more tenuous than its authority to 
11

impose the standard LGIA writ large. If the entire LGIA bears 

a close enough relationship to FERC’s authority over interstate 

transmission facilities, as we have held, then so do the few 

LGIA provisions that specifically address the maintenance of 

an effective circuit breaker. See id. at 1282.

Finally, FERC’s assertion of jurisdiction over Seabrook’s

circuit breaker is consistent with the core statutory purpose of 

ensuring that different generators may safely and reliably 

connect to the interstate transmission system. See S.C. Pub.

Serv. Auth. v. FERC, 762 F.3d 41, 63 (D.C. Cir. 2014). As 

explained above, the parties do not dispute that unless 

Seabrook upgrades the breaker, Avangrid may not connect.

B

On the merits, FERC correctly construed the LGIA to 

require Seabrook to upgrade its circuit breaker.

Article 9.7.5 of the LGIA requires Seabrook, in

compliance with “Good Utility Practice,” to “provide, install, 

own, and maintain relays, circuit breakers and all other devices 

necessary to remove any fault contribution” of Seabrook “to 

any short circuit occurring” on the transmission system. J.A. 

326. Article 9.7.5 further makes Seabrook “solely responsible

to disconnect” if grid conditions “could adversely affect” the 

power plant. Id. at 326–27. Seabrook argues its duty to 

mitigate short circuits requires only a snapshot assessment of

whether its circuit breaker is up to the task at any fixed moment 

in time. But as the Commission explained, Seabrook’s

obligation to “install” and then “maintain” a circuit breaker 

imposes a “continuing responsibility” to have an adequate

breaker in place, which means a breaker capable of protecting 

Seabrook in light of changing grid conditions. See NextEra 

Energy Seabrook, 183 FERC ¶ 61,196, P 22. And given the 

thrust of Orders 888 and 2003—expanding independent 
12

generators’ access to the grid—such changing conditions must 

include the interconnection of new generators like Avangrid.

The LGIA’s definition of “Good Utility Practice” 

reinforces this conclusion. Article 1 of the LGIA defines that 

phrase to include practices that, “in the exercise of reasonable 

judgment in light of the facts known at the time the decision 

was made, could have been expected to accomplish the desired 

result at a reasonable cost consistent with good business 

practices, reliability, safety and expedition.” J.A. 283. 

Seabrook does not dispute that maintaining a circuit breaker 

capable of protecting its plant from fault currents is necessary

to ensure safety and reliability at a reasonable cost. Nor could 

it, given FERC’s uncontested finding that the failure of an 

“overdutied” breaker “could lead to catastrophic equipment 

failure at the nuclear facility.” NextEra Energy Seabrook, 182 

FERC ¶ 61,044, P 84. Seabrook does contend that its refusal 

to upgrade the breaker would prevent new generators from 

joining the grid and thus ensure that the breaker remains 

adequate. But this kind of anti-competitive behavior is hardly 

consistent with “good business practices.” J.A. 283. And 

contractual provisions purporting to authorize such anticompetitive behavior would likely be unenforceable in any 

event. See Restatement (Second) of Contracts §186 (1981) (“A 

promise is unenforceable on grounds of public policy if it is 

unreasonably in restraint of trade.”).

Seabrook claims that section I.3.10 of the ISO New 

England tariff prevents any danger of overloading the circuit 

breaker. That provision states that if a market participant’s

planned project would “have a significant adverse effect upon 

the reliability or operating characteristics” of facilities of 

another market participant, the proponent “shall not proceed to 

implement such plan unless” it “takes such action or constructs 

at its expense such facilities as the ISO determines to be 
13

reasonably necessary to avoid such adverse effect.” J.A. 724. 

Under Seabrook’s reading, this provision forbids Avangrid 

from connecting the NECEC project to the grid unless and until

Seabrook upgrades its circuit breaker. And because the breaker 

reliably protects the nuclear plant without Avangrid’s power 

added to the grid, Seabrook currently has no duty to upgrade. 

Seabrook frames its position as merely enabling it to insist 

on receiving full compensation for the upgrade. But 

Seabrook’s position plainly implies that it may exclude 

Avangrid from the grid by refusing to upgrade its circuit

breaker, no matter what compensation Avangrid offered or was 

ordered to pay. Even worse, the argument further implies that

Seabrook may prevent interconnection by any new generator 

whose additional power would nudge its breaker from 99.6 

percent of capacity to just over 100 percent. This concern is 

not hypothetical. After Avangrid applied to interconnect, ISO

New England received many other interconnection requests—

all of which it expects to “have some impact on the Seabrook 

Breaker,” and all of which “assumed that the Seabrook Breaker 

will be upgraded.” Id. 537. Although Seabrook tries to 

obfuscate the troubling implications of its position, the dissent 

acknowledges and embraces them. See post at 4–5.

In our view, Seabrook misreads the tariff. By its terms, 

section I.3.10 prevents a project sponsor from proceeding only 

until it “constructs at its expense such facilities as the ISO 

determines to be reasonably necessary to avoid” adverse 

impacts on other facilities. J.A. 724. That provision does not 

foreclose Avangrid from connecting to the grid unless and until 

Seabrook agrees to the interconnection. Instead, it merely 

requires Avangrid to construct, or at least pay for, facilities 

reasonably necessary to prevent its interconnection from 

harming other generators or transmission owners. Here, that 

means Avangrid must pay for an upgrade of Seabrook’s circuit 
14

breaker. Regulatory context reinforces this conclusion. As 

explained above, the governing tariff and LGIA implement a 

regime to facilitate market entry by new generators. And that

requires access to the transmission grid. Giving incumbent 

generators a veto over new entry would frustrate that system. 

For these reasons, Seabrook is wrong to argue that the tariff 

negates its obligation to maintain the circuit breaker in 

anticipation of changing conditions and new entrants.

The dissent frames its analysis around the proposition that 

section I.3.10 of the tariff does not require Seabrook to upgrade 

its circuit breaker, as FERC has acknowledged. Post at 6 

(citing NECEC Transmission LLC, 176 FERC ¶ 61,148, P 23 

(2021)). That much is true; the duty to upgrade arises under 

article 9.7.5 of the LGIA, construed in accordance with the 

LGIA’s definition of Good Utility Practice. Section I.3.10 

addresses the duty to pay for the upgrade, which falls on 

Avangrid. The dissent chides us for giving short shrift to the 

text of section I.3.10. But the dissent does not explain how that 

provision, which requires Avangrid to “construct[] at its 

expense” the necessary upgrade, grants Seabrook a unilateral 

right to veto Avangrid’s interconnection.

The dissent further says that we interpret section I.3.10 as 

permitting Avangrid to connect to the grid before Seabrook 

upgrades its circuit breaker. Post at 6. But as we have already 

indicated, we agree with the dissent on this point: Section 

I.3.10 clearly prohibits Avangrid from interconnecting until the 

new breaker is constructed. Our disagreement with the dissent 

centers on other points: whether article 9.7.5 of the LGIA 

requires Seabrook to maintain an adequate breaker as new 

generators join the grid (it does) and whether section I.3.10 of 

the tariff permits Seabrook to frustrate new entrants by refusing 

to upgrade the breaker (it does not).
15

Lastly, the dissent criticizes us for even considering

statutory and regulatory purpose in construing the LGIA and 

the tariff. But the LGIA is no ordinary private contract; it is a 

standard set of terms imposed by FERC to advance the goal of 

Orders 888 and 2003 to foster competition in electricity 

markets. The dissent does not dispute that its reading of the 

tariff and LGIA would frustrate that goal. Yet courts should 

prefer textually permissible readings that would advance 

statutory or regulatory goals over ones that would frustrate 

them. See, e.g., Staub v. Proctor Hosp., 562 U.S. 411, 420

(2011) (Scalia, J.); A. Scalia & B. Garner, Reading Law 63 

(2012) (“A textually permissible interpretation that furthers 

rather than obstructs a document’s purpose should be 

favored.”). These are bedrock principles of statutory 

construction. Our application of them here does not, as the 

dissent contends, smuggle into our analysis a “Chevron-like 

framework,” post at 6.1

C

In the orders under review, FERC refused to order 

Avangrid to reimburse Seabrook for certain indirect upgrade 

1 Seabrook and the dissent also invoke article 30.5 of the LGIA, 

which states that the agreement “does not create rights, remedies, or 

benefits” in favor of any third parties. J.A. 356; see post at 6–7 n.3. 

We read that provision to mean that Avangrid cannot claim status as 

an intended third-party beneficiary to that contract, which would 

enable it to sue in court for breach of contract. See, e.g., Brooks v. 

Trs. of Dartmouth Coll, 20 A.3d 890, 900 (N.H. 2011); Restatement 

(Second) of Contracts § 302 cmt. a (1981). We do not read that 

provision—imposed by FERC in Order No. 2003—to restrict 

FERC’s own authority to police transactions or facilities as otherwise 

authorized by section 201(b). Nor do we read it to cabin the reach of 

article 9.7.5. 
16

costs, including legal expenses and opportunity costs in the 

form of lost profits. FERC reasoned that neither the ISO New 

England tariff nor agency precedent affords compensation for 

such indirect costs. NextEra Energy Seabrook, 182 FERC ¶ 

61,044, PP 100–06; NextEra Energy Seabrook, 183 FERC ¶ 

61,196, PP 36–46. Seabrook contends that this determination

was arbitrary. We disagree.

As noted above, section I.3.10 of the tariff provides that if 

a new interconnection would impose a “significant adverse 

effect” on the systems of an incumbent generator, the 

connection may not proceed until the new participant “takes 

such action or constructs at its expense such facilities” as are 

reasonably necessary to avoid the harm. J.A. 724. This 

provision makes Avangrid responsible for the direct costs of 

replacing the circuit breaker, which involve “construct[ing]” 

the “facilities” necessary to protect Seabrook from future fault 

currents. But foregone profits or legal expenses cannot easily

be described as the costs of constructing new facilities. 

Moreover, as we explained in rejecting a transmission owner’s 

claim for outage costs, “under well-established FERC rules, all 

rates and charges must be clearly and specifically set forth.” S. 

Co. Servs., Inc. v. FERC, 353 F.3d 29, 34 (D.C. Cir. 2003). 

Here, even if the tariff arguably reaches the indirect costs 

demanded by Seabrook, it does not cover those costs “clearly 

and specifically.”

FERC also correctly described its own precedent, under 

which opportunity costs are not usually available for outages 

made to complete a generator interconnection. In Order No. 

2003, the Commission reasoned that estimating such costs in 

advance is often difficult and, as a general matter, such outages 

“should be considered a normal part of doing business.” 104 

FERC ¶ 61,103, PP 714–15. FERC then clarified that a 

generator or transmission owner may recover for outage costs 
17

if “the Interconnection Agreement specifically authorizes it” 

and if recovery is “justified on a case-by-case basis.” Order 

No. 2003-A, 106 FERC ¶ 61,220, P 647; see, e.g., Midwest 

Independent Transmission System Operator, Inc., 100 FERC 

¶ 61,262, PP 44–46 (2002). But the threshold for finding that 

an interconnection agreement provides for recovery of indirect 

costs is high. For instance, in Southern Company Services, we 

upheld the denial of outage costs despite a provision in the 

interconnection agreement allowing recovery for “‘all costs 

and expenses’ in connection with ‘planning, design, 

construction, [and] installation’ of the interconnection 

facilities.” 353 F.3d at 34. Here, neither the tariff nor the LGIA 

provides for any broader recovery. 

Seabrook takes issue with FERC’s reliance on the tariff at 

all. It observes that the Commission declined to rely on the 

tariff in finding a duty to upgrade the circuit breaker, but then 

invoked the tariff to determine the amount of its requisite 

compensation. We see no contradiction. The fact that the tariff 

obligates new interconnection customers to pay for direct but 

not indirect costs of any necessary upgrades is irrelevant to the 

question whether the LGIA requires incumbent generators like 

Seabrook to allow the upgrades.

Seabrook also invokes the “cost causation” principle, 

which provides that “costs are to be allocated to those who 

cause the costs to be incurred and reap the resulting benefits.” 

S.C. Pub. Serv. Auth., 762 F.3d at 85 (cleaned up). If the 

upgrade is necessary to connect Avangrid to the interstate 

transmission system, Seabrook reasons, then Avangrid should 

pay its full cost. But the tariff does require Avangrid to pay the

full direct costs of replacing the circuit breaker. Moreover, as 

FERC explained, the upgrade may also be fairly described as 

benefitting Seabrook by allowing it to continue selling power 

through an integrated and expanding transmission system. 
18

NextEra Energy Seabrook, 182 FERC ¶ 61,044, P 105. In any 

event, the cost-causation principle does not require FERC to 

“allocate costs with exacting precision.” Old Dominion Elec. 

Coop. v. FERC, 898 F.3d 1254, 1260 (D.C. Cir. 2018) (cleaned 

up). And FERC has never understood that background 

principle generally to require compensation for indirect costs 

such as lost profits during interconnection outages.

Seabrook notes that, in certain limited contexts, FERC has 

allowed recovery of opportunity costs where necessary to 

eliminate perverse incentives, such as for delay. Here, though,

FERC found that “there is no perverse incentive that would be 

remedied by opportunity costs.” NextEra Energy Seabrook, 

182 FERC ¶ 61,044, P 102. To the contrary, it concluded that 

Seabrook—which must manage any upgrade of its own circuit 

breaker—“is in the best position to ensure” that the outage 

period is not unduly extended. Id. P 105. We see no good 

reason to question the reasonableness of this expert and 

seemingly obvious judgment.

Finally, Seabrook raises the specter of “enterprise risk” 

from the “catastrophic consequences” of a botched upgrade. 

Pet. Br. at 52. On this point, the parties spar over FERC’s 

rulings that consequential damages are generally unavailable in 

the interconnection context and that Seabrook did not preserve 

a claim for such damages in the administrative proceedings 

under review. See NextEra Energy Seabrook, 183 FERC ¶ 

61,196, P 39. For the reasons explained above, we see nothing 

arbitrary in FERC’s rulings that such damages are generally 

unavailable and should not be evaluated ex ante. Beyond that, 

we reserve judgment on the question whether, if the worst-case 

scenario imagined by Seabrook comes to pass, there would be 

any mechanism for further compensation based on whatever 

happens when the upgrade actually takes place.
19

In sum, FERC did not arbitrarily deny recovery for indirect

costs at this time. The tariff does not compel such recovery, 

and FERC decisions make it at least generally unavailable.

III

FERC did not exceed its statutory jurisdiction, correctly

interpreted the governing tariff and LGIA, and permissibly 

denied Seabrook compensation for any indirect costs. We 

therefore deny the petitions for review.

So ordered.
RAO, Circuit Judge, dissenting: At the center of this case 

is a contract dispute. Is Seabrook Station required to upgrade 

its circuit breaker so that Avangrid can connect to the ISO New 

England grid? Under the plain meaning of the relevant 

contracts, Seabrook has no such obligation. The Federal 

Energy Regulatory Commission reached the opposite 

conclusion in order to prevent Seabrook from holding up a 

competitor’s interconnection. The majority takes a similar 

approach. But under longstanding precedent, FERC must 

interpret tariffs and contracts according to their plain meaning, 

a rule that promotes stability and predictability in the provision 

of energy. FERC has no authority to ignore the terms of a tariff 

to achieve particular policy outcomes. If FERC finds the 

application of a tariff unjust and unreasonable, section 206 of 

the Federal Power Act provides a process for modifying it. 

Because FERC neither followed the plain meaning of the ISO 

New England Tariff nor modified it through a section 206 

proceeding, its order should be vacated. I respectfully dissent. 

I. 

NextEra Energy Seabrook, LLC, owns Seabrook Station, 

a nuclear power plant. When Seabrook connected to the power 

grid, it entered into a contract with ISO New England and New 

Hampshire Transmission. This Large Generator 

Interconnection Agreement (LGIA) requires Seabrook to 

maintain a breaker adequate to avoid faults, consistent with 

Good Utility Practice. LGIA art. 9.7.5. Seabrook’s circuit 

breaker is currently adequate but will become overloaded if 

more entrants connect to the grid. Avangrid, a competitor to 

Seabrook, seeks to connect its New England Clean Energy 

Connect (NECEC) project to the grid. The ISO New England 

Tariff provides detailed rules governing new interconnections. 

In particular, section I.3.10 prevents interconnections until a 

new entrant “constructs at its expense” any facilities the ISO 

determines are “reasonably necessary to avoid” the “adverse 

effect[s]” caused by the interconnection. ISO New England 
2 

identified upgrading Seabrook’s breaker as the only 

technologically feasible way to avoid an adverse effect from 

Avangrid connecting. 

Seabrook and Avangrid disagree about what obligations 

the LGIA and Tariff place on Seabrook to upgrade its breaker. 

FERC concluded that Seabrook would violate article 9.7.5 of 

the LGIA if it did not upgrade its breaker, and the majority 

agrees. 

II. 

Under the Administrative Procedure Act, we “decide all 

relevant questions of law.” 5 U.S.C. § 706. We interpret FERC 

tariffs like contracts and “must enforce unambiguous tariff 

language.” Long Island Power Auth. v. FERC, 27 F.4th 705, 

716 (D.C. Cir. 2022). Because contract interpretation is a 

question of law, we do not defer to agencies.1 See Loper Bright 

Enters. v. Raimondo, 144 S. Ct. 2244, 2265 (2024). Our task is 

not to interpret with an eye to policy, but simply to “determine 

the plain meaning of” the tariff. Ameren Servs. Co. v. FERC, 

330 F.3d 494, 499 (D.C. Cir. 2003); see also Idaho Power Co. 

v. FERC, 312 F.3d 454, 462 (D.C. Cir. 2002) (“The fact that 

FERC’s order[] directly conflict[s] with the plain meaning of 

the tariff alone merits a reversal.”). 

The majority and the Commission conclude that Seabrook 

would breach the LGIA if it declined to upgrade its breaker. 

The problem with this interpretation, however, is that neither 

1

 While we have never deferred to agencies’ interpretation of 

unambiguous contracts, we sometimes afforded Chevron-like 

deference to FERC’s interpretation of ambiguous contracts. See

Ameren Servs. Co. v. FERC, 330 F.3d 494, 498–99 (D.C. Cir. 2003). 

That practice, however, is incompatible with the Supreme Court’s 

recent decision in Loper Bright. 
3 

the Tariff nor the LGIA requires Seabrook to upgrade its 

breaker to accommodate Avangrid’s connection. Without a 

contractual obligation to upgrade, Seabrook cannot be in 

violation of the LGIA.2

 

I begin with the text of the relevant contracts—the Tariff 

and the LGIA. The Tariff details the parties’ rights and 

obligations with respect to a new interconnection. Section 

I.3.10 of the Tariff provides that a new project like Avangrid’s 

cannot interconnect until it “constructs at its expense such 

facilities as the ISO determines to be reasonably necessary to 

avoid [any identified] adverse effect.” Only when a new project 

satisfies the requirements of section I.3.10 will it “have the 

right to be interconnected.” Tariff § II.47.5. Everyone agrees 

that if Avangrid connects, Seabrook’s breaker will be 

overloaded, and so “Avangrid cannot connect to the grid unless 

and until Seabrook upgrades the breaker.” Majority Op. 6. 

While an upgrade is necessary for Avangrid to connect, the 

Tariff imposes no duty on Seabrook to agree to the upgrade. 

Neither FERC nor the majority point to any such provision in 

the Tariff. In fact, the Tariff provision that imposes a duty on 

some incumbents to upgrade does not apply to Seabrook. As 

FERC correctly concluded, that provision applies only to 

“Network Upgrades,” a defined term that does not include 

upgrades to generation facilities like Seabrook Station. 

NextEra Energy Seabrook, LLC, 182 FERC ¶ 61,044, P 76 

(2023) (interpreting, in relevant part, Tariff Schedule 25, 

§ 3.2.2.1). The natural consequence of having no contractual 

duty to upgrade is that Seabrook may exercise veto power, 

because upgrades to Seabrook’s breaker are a condition 

precedent to Avangrid’s interconnection. 

2

 Because I find Seabrook has no contractual obligation to upgrade, 

I need not address the allocation of indirect costs for such an upgrade. 
4 

Indeed, FERC recognized that this was the most natural 

reading of the Tariff when, one year into this three-year 

proceeding, the Commission initiated a parallel section 206 

proceeding and solicited proposed modifications to the Tariff. 

As FERC explained, the Tariff “could create the situation 

where” an interconnection could not occur until an upgrade is 

made to “an existing generator,” like Seabrook, but the Tariff 

“does not require the existing generator to take action with 

respect to” that upgrade. NECEC Transmission LLC, 176 

FERC ¶ 61,148, P 23 (2021). Under this reading, the Tariff 

“may be unjust and unreasonable.” Id. FERC realized that the 

Tariff allowed for the type of hold up problem present in this 

case and that, to address the problem, the Tariff would need to 

be modified. The majority agrees: “the tariff does not require 

Seabrook to upgrade its circuit breaker.” Majority Op. 14. 

Once we recognize that the Tariff imposes no obligation 

on Seabrook to upgrade, and that the Tariff prevents Avangrid 

from connecting unless Seabrook agrees to make the upgrades, 

there can be no violation of the LGIA if Seabrook chooses not 

to upgrade. Under article 9.7.5 of the LGIA, Seabrook must 

maintain an adequate circuit breaker; but Seabrook’s breaker is 

currently adequate. 

Reading the Tariff and the LGIA together, Seabrook has 

no duty to upgrade in order for Avangrid to connect. If 

Seabrook refuses to upgrade, then under the Tariff, Avangrid 

cannot connect, and the breaker will remain adequate. The only 

scenario in which Seabrook’s breaker would be overloaded—

if Avangrid interconnects but Seabrook does not upgrade—is 

expressly foreclosed by the Tariff. 

III. 

Neither FERC nor the majority grapple with the plain 

meaning of the contracts. Their conclusion that Seabrook must 
5 

upgrade for Avangrid’s connection ultimately depends on 

policy concerns about ensuring competition and open grid 

access. Yet policy concerns cannot rewrite the terms set in the 

Tariff and the LGIA. 

FERC’s orders focus on the policy problem of allowing 

Seabrook to have veto power over Avangrid’s connection. 

Notably, FERC did not refute Seabrook’s argument about 

Tariff section I.3.10, namely that Avangrid’s interconnection 

“cannot occur until Seabrook’s breaker is replaced.” NextEra 

Energy Seabrook, LLC, 183 FERC ¶ 61,196, P 23 (2023). 

Instead, FERC expressed “concern” that Seabrook was 

“exercising veto power over the interconnections of new and 

competing interconnection customers.” Id. With no 

consideration of the import of Tariff section I.3.10, FERC 

assessed what would happen if Avangrid connected before 

Seabrook upgraded. FERC found that Seabrook’s “breaker will 

be overdutied following [Avangrid’s] authorized 

interconnection” and that the Good Utility Practice “standard 

would be violated if Seabrook failed to replace the breaker 

prior to energization of [Avangrid’s] Project.” Id. at PP 21, 24 

(emphases added). The problem FERC sought to avoid, 

however, is unambiguously foreclosed by Tariff section I.3.10. 

The majority’s primary argument is that the LGIA requires 

Seabrook to “maintain” an adequate breaker and this imposes 

a “continuing responsibility” to upgrade its facilities when 

there are changes to the grid. Majority Op. 11. Yet that still 

leaves the question of whether Avangrid’s new connection is 

the type of change that requires Seabrook to make an upgrade. 

On this key question, the majority cannot point to any 

contractual provision and so must rely on policy concerns 

about equal access to the grid and the ipse dixit that “changing 
6 

conditions must include the interconnection of new 

generators.” Majority Op. 12 (emphasis added). 

The majority’s conclusion also rests on the premise that, 

despite section I.3.10 of the Tariff, Avangrid may connect 

before Seabrook’s breaker is upgraded and cause an overload. 

But this premise is contrary to both Seabrook’s and Avangrid’s 

reading of the Tariff and relies on a Tariff interpretation that 

the Commission never expressed. In fact, FERC has recognized 

that when the necessary upgrade must be made to an existing 

generation facility such as Seabrook Station, the Tariff does not 

impose any requirement on that facility to make the upgrade. 

NECEC Transmission LLC, 176 FERC ¶ 61,148, P 23 (2021). 

Because the Tariff also plainly prevents Avangrid from 

interconnecting until after Seabrook’s breaker upgrade is 

constructed, there is no risk of an overloaded breaker. 

Finally, the majority reverts to a Chevron-like framework, 

insisting its interpretation is “textually permissible” and 

consistent with regulatory goals. Even assuming for a moment 

the majority’s interpretation is permissible, which it is not, it is 

certainly not the best interpretation because it does not account 

for section I.3.10 of the Tariff. And if an interpretation “is not 

the best, it is not permissible.” Loper Bright Enters., 144 S. Ct. 

at 2266. 

Whether Seabrook having veto power “would frustrate” 

the interconnection process and whether that veto power is 

inconsistent with the policy goals of other FERC orders are 

irrelevant to the court’s interpretive task, which requires 

enforcing the “plain meaning” of FERC tariffs.3 Ameren Servs. 

3

 In any event, the majority reads the purposes of the LGIA too 

broadly. FERC has undoubtedly sought to promote competition, but 

the LGIA furthered that goal in a specific way by “preventing 

transmission facility owners from favoring affiliated generators over 
7 

Co., 330 F.3d at 499. It is improper to overrule the plain 

meaning by “say[ing] that since the overall purpose of the 

[contract] is to achieve x, any interpretation of the text that 

limits the achieving of x must be disfavored.” A. Scalia & B. 

Garner, Reading Law 168 (2012). 

Moreover, the LGIA is governed by New Hampshire law, 

which similarly requires following the ordinary meaning of 

contracts. LGIA art. 14.2.1; Greenhalgh v. Presstek, Inc., 886 

A.2d 1000, 1003 (N.H. 2005). Neither FERC nor the majority 

provide an explanation for why federal energy policy concerns

are relevant to finding the plain meaning of the LGIA under 

New Hampshire law. Because there is no contractual duty in 

the Tariff or the LGIA that prevents Seabrook from exercising 

veto power, FERC cannot impose one through interpretation. 

But FERC is not without authority to address what it 

considers an undesirable hold-up problem. FERC may initiate 

a section 206 proceeding and modify the Tariff if the 

Commission determines its plain meaning is “unjust, 

unreasonable, unduly discriminatory or preferential.” 16 

U.S.C. § 824e(a). If Seabrook having veto power over new 

entrants is—as it may well be—unjust and unreasonable, 

FERC can modify the Tariff to eliminate Seabrook’s veto 

power. Because FERC reached the policy outcome it desired 

by departing from the plain meaning of the Tariff, it abandoned 

the section 206 proceeding it had initiated. NextEra Energy 

Seabrook, LLC, 183 FERC ¶ 61,196 at P 50.

independents in interconnection.” Nat’l Ass’n of Regul. Util. 

Comm’rs v. FERC, 475 F.3d 1277, 1279 (D.C. Cir. 2007). The goal 

of fostering competition does not extend to third parties like 

Avangrid because the LGIA plainly states that it is “not intended” to 

“create rights, remedies, or benefits” for third parties. LGIA art. 30.5. 
8 

The broader regulatory context and policy concerns cited 

by the majority may be relevant to FERC’s determinations 

when setting just and reasonable rates and practices. These 

considerations, however, are impermissible for the judicial task 

of identifying the plain meaning of existing tariffs and 

contracts.

* * * 

FERC possesses fairly sweeping authority to approve and 

prospectively modify tariffs under a just and reasonable 

standard. Once those tariffs are set, however, they are binding 

contracts that must be enforced according to their plain 

meaning, and FERC cannot retroactively change them. Okla. 

Gas & Elec. Co. v. FERC, 11 F.4th 821, 829 (D.C. Cir. 2021) 

(discussing the filed rate doctrine). The ordinary meaning of a 

tariff provides vital notice to regulated parties about what is 

required and allows those parties to order their business 

accordingly. 

Leaning heavily on policy concerns, the majority allows 

FERC to deviate from the terms of a tariff. This has the same 

effect as a retroactive change, which the Supreme Court has 

recognized “could have an ‘unsettling effect on 

other ... transactions’ and would have a ‘potential for 

disruption of ... markets.’” Ark. La. Gas Co. v. Hall, 453 U.S. 

571, 579 (1981) (quoting Ark. La. Gas Co. v. Hall, 13 FERC 

¶ 61,000, 61,213 (1980)). 

Prospective changes to the Tariff must be pursued in a 

section 206 proceeding, which protects the reliance interests of 

regulated parties. Before modifying a tariff, FERC must find 

the “existing rates ... to be entirely outside the zone of 

reasonableness.” City of Winnfield v. FERC, 744 F.2d 871, 875 

(D.C. Cir. 1984) (Scalia, J.). And section 206 requires FERC 

to exercise its policymaking authority with regulatory 
9 

protections such as notice to affected parties and a hearing. 16 

U.S.C. § 824e(a). The abandoned section 206 proceeding in 

this case, for example, prompted dozens of filings from public 

and private entities. See In re ISO New England, FERC Docket 

No. EL21-94-000. Following the section 206 process would 

have also allowed FERC to consider more fully the 

consequences of modifying the Tariff, such as the other issue 

in this case: how the costs of any required upgrades should be 

allocated. 

Because the Tariff and the LGIA imposed no obligation on 

Seabrook to upgrade its facilities to allow Avangrid to connect, 

I would grant Seabrook’s petition and vacate FERC’s order.