United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 1, 2021 Decided January 25, 2022

No. 20-1084

THE CITY AND COUNTY OF SAN FRANCISCO,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

PACIFIC GAS AND ELECTRIC COMPANY,

INTERVENOR

Consolidated with 20-1297

On Petitions for Review of Orders

of the Federal Energy Regulatory Commission

Katharine M. Mapes argued the cause for petitioner. With 

her on the briefs were William S. Huang and Jeffrey M. Bayne.

Scott Ray Ediger, Attorney, Federal Energy Regulatory 

Commission, argued the cause for respondent. With him on 

the brief were Matthew R. Christiansen, General Counsel, and 

Robert H. Solomon, Solicitor.
2

Joshua S. Levenberg argued the cause for intervenor 

Pacific Gas and Electric Company in support of respondent. 

With him on the brief was Alexandra J. Ward. Alyssa T. Koo

entered an appearance.

No. 20-1313

CITY AND COUNTY OF SAN FRANCISCO,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

Consolidated with 20-1458

On Petitions for Review of Orders

of the Federal Energy Regulatory Commission

Katharine M. Mapes argued the cause for petitioner. With 

her on the briefs were William S. Huang and Jeffrey M. Bayne.

Scott Ray Ediger, Attorney, Federal Energy Regulatory 

Commission, argued the cause for respondent. With him on 

the brief were Matthew R. Christiansen, General Counsel, and 

Robert H. Solomon, Solicitor.
3

Alexandra J. Ward argued the cause for intervenor Pacific 

Gas and Electric Company in support of respondent. With her 

on the brief were Joshua S. Levenberg, Laura Edelstein, Steven 

J. Ross, and Shaun M. Boedicker. Alyssa T. Koo entered an 

appearance.

Before: SRINIVASAN, Chief Judge, ROGERS and TATEL, 

Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS. 

ROGERS, Circuit Judge: San Francisco petitions for review 

of orders by the Federal Energy Regulatory Commission

denying its complaints and requests for rehearing regarding its 

delivery of electricity to end users. San Francisco purchases 

distribution services from the Pacific Gas & Electric Company 

(“PG&E”) under the terms of its open-access Tariff. It

challenged PG&E’s refusal to: (1) offer secondary-voltage 

service in lieu of more burdensome primary-voltage service to 

certain San Francisco sites and (2) provide service to delivery 

points that San Francisco maintains are eligible for service 

under the Tariff’s grandfathering provision. San Francisco 

contends that the Commission erred both when it found that 

PG&E’s denial of secondary-voltage service was consistent 

with Tariff requirements and the Federal Power Act, and when 

it interpreted the Tariff’s grandfathering provision narrowly to 

allow PG&E’s interpretation. For the following reasons, the 

court grants San Francisco’s petitions. 

I.

Electricity flows from generators to end users in two 

stages: transmission and distribution. Transmission lines 

transport bulk power from generators across long distances. 

That power is reduced to a lower voltage by a transformer and 
4

flows to consumers through distribution lines. U.S. Dep’t of 

Energy, United States Electricity Primer, DOE/OE-0017, at 

13, 21 (July 2015). Distribution lines operate at higher 

(primary) and lower (secondary) voltages. Because consumers 

typically cannot use electricity at primary voltages, consumers 

that receive primary-voltage service require a transformer to 

reduce the electricity’s voltage in addition to primary metering 

and other equipment. Therefore, primary-voltage service 

involves relatively high fixed costs, but is cheaper per unit of 

electricity provided. By contrast, secondary-voltage service 

has lower fixed costs but higher unit costs. See Complaint (No. 

20-1313), Decl. of Rod Maslowski, Senior Consultant with 

Flynn Resource Consultants, ¶¶ 7-8.

San Francisco’s publicly owned utility, the San Francisco 

Public Utilities Commission, owns a power supply system in 

the Hetch Hetchy Valley and transmission lines that transmit 

power to San Francisco. Id. at 5-6. San Francisco sells Hetch 

Hetchy power directly to the end-users in the city. It obtained 

the property rights to develop the Hetch Hetchy System under 

the Raker Act of 1913, Pub. L. No. 63-41, 38 Stat. 242 (1913). 

There, “Congress was motivated by a desire to provide the 

people of San Francisco with the advantages of cheap power 

and City competition with private power companies such as 

Pacific Gas and Electric.” City & Cnty. of San Francisco v. 

United Airlines, 616 F.2d 1063, 1068 (9th Cir. 1979). 

San Francisco does not own distribution lines, however, 

and relies on PG&E’s distribution system to serve its end-users. 

Complaint (No. 20-1313) at 2. It prefers to receive secondary 

voltage from PG&E’s distribution system because electricity 

from PG&E is delivered to over 2,200 metered interconnection 

points, most of which serve a single building. Id. at 3, 

Maslowski Decl. ¶ 6. Because a relatively small amount of 

electricity is required at many points, San Francisco prefers to 
5

avoid the high fixed costs of receiving primary-voltage service

at each point. Id. at 17. And because PG&E’s retail service 

area covers the city, the San Francisco Commission is both a 

customer and competitor of PG&E.

From 1945 to 2015, San Francisco purchased wholesale 

distribution service from PG&E under a series of bilateral 

agreements, the most recent of which was signed in 1987. 

While San Francisco was receiving service pursuant to the 

1987 agreement, the Federal Energy Regulatory Commission 

(the “Commission”) approved PG&E’s Tariff, which stated the 

generally applicable terms for “open-access” wholesale 

distribution service. Pac. Gas & Elec. Co., Wholesale 

Distribution Tariff, FERC Electric Tariff Volume No. 4, 

Docket Nos. EL15-3-002, et al., Ex. PGE-7.

II.

San Francisco’s complaint in No. 20-1313 concerns 

PG&E’s refusal to provide secondary-voltage distribution 

service at certain interconnection points. 

A.

In 2015, San Francisco entered a new contract with PG&E 

for service under its open-access Tariff. Complaint at 2. Under 

their previous agreement, 96% of its end-users were connected 

to PG&E’s distribution system at secondary voltage. Id., 

Maslowski Decl. ¶ 6. PG&E allows retail customers to receive 

secondary voltage if their demand is below 3,000 kW. 

Complaint, Maslowski Decl. ¶ 7. PG&E currently provides 

secondary-voltage service to the Western Area Power 

Administration (“Western”) and the Power and Water 

Resources Pooling Authority (“Pooling Authority”) for 

demands as high as 428 kilowatts (“kW”) for Western and 
6

1,296 kW for the Pooling Authority. Request for Rehearing at 

16-17. 

On January 28, 2019, San Francisco filed a complaint with 

the Commission pursuant to Sections 206, 306, and 309 of the 

Federal Power Act (“FPA”), 16 U.S.C. §§ 824e, 825e, 825h. 

San Francisco alleged that PG&E has “consistently” refused to 

make new interconnections at secondary voltage unless the 

total electricity demand is less than 75 kW. Complaint at 10. 

This practice, it claimed, (1) was unjust, unreasonable, and 

unduly discriminatory, and (2) violated the terms of the 

Wholesale Distribution Tariff. Id. at 1. Further, it alleged that 

PG&E had categorically denied San Francisco’s applications 

for secondary-voltage service for demands above 75 kW while 

granting secondary-voltage service for much larger demands 

for its own retail customers and other wholesale customers 

such as Western. Id. at 3, 21, Maslowski Decl. ¶ 27. PG&E’s 

denials of secondary-voltage service, allegedly, “have imposed 

undue burdens and costs on San Francisco,” including 

“delays.” Id. at 31-32. Yet PG&E’s Tariff required it to offer 

secondary service whenever requested, and to expand its 

infrastructure when such service was initially infeasible. Id. at 

23-27. San Francisco also objected to PG&E’s refusal to 

provide “primary plus” service in the alternative, where San 

Francisco would receive secondary voltage while paying 

PG&E for maintaining the facilities necessary to provide 

secondary voltage. Id. at 16, Maslowski Decl. ¶ 9.

PG&E acknowledged that its Tariff provides for two levels 

of service but maintained that it had not given customers the 

right to dictate the level of service to be received. Answer to 

Complaint at 5-6. It also denied that it had a categorical 75 kW 

threshold for secondary-voltage applications, noting that most 

of San Francisco’s new interconnections were at secondary 

voltage, including many above 75 kW, and that it had regularly 
7

granted variances to San Francisco. Id. at 7-15. Any denials 

of secondary-voltage service, it asserted were supported by 

“technical, safety, reliability, and operational reasons.” Id. at 

15. Further, PG&E claimed that San Francisco was to blame 

for many of the delays in service, id. at 23, and that Western’s 

secondary-voltage service was governed by a settlement 

agreement to which San Francisco is not a party, id. at 28-29. 

Evidence before the Commission showed that since 2015, 

many of San Francisco’s new interconnection requests 

exceeding 75 kW have been denied secondary service by 

PG&E, and that the proportion of new interconnections above 

75 kW receiving primary service has increased since 2015. See 

id. at 11 (chart 3). Specifically, PG&E had stated that “if the 

requested [demand] exceeds 75 kW, PG&E informs [San 

Francisco] that it will need to take primary service.” Id. at 30. 

In some instances, San Francisco was initially denied 

secondary-voltage service, but negotiated for secondary 

voltage or a “secondary metering” arrangement, reducing its 

costs of receiving primary voltage. Complaint at 13-14; Decl. 

of Barbara Hale, Asst. Gen. Mgr., San Francisco Public 

Utilities Commission, ¶¶ 9-11. In July 2019, PG&E advised 

San Francisco that it “is not willing to make additional 

accommodations without a long-term solution.” Letter from 

Yilma Hailemichael, PG&E Mgr., to Ramon Abueg, Dep. Mgr. 

Operations at San Francisco Pub. Utils. Comm’n, at 3 (July 1, 

2019) (hereinafter, the July 1, 2019 Letter).

The Commission denied San Francisco’s complaint, ruling 

that PG&E should retain discretion to determine what level of 

service is most appropriate for a customer because the provider 

“is ultimately responsible for the safety and reliability of its 

distribution system.” Order, 171 FERC ¶ 61,021 at P 38

(2020). It found that San Francisco received secondary service 

for the “majority of its interconnections with PG&E,” id. P 36, 
8

as well as variances for other interconnections. Id. P 37. 

Noting that “primary service is the norm for utility-to-utility 

interconnections,” id., the Commission distinguished the 

service provided to retail customers and wholesale customers 

whose service was governed by a settlement agreement. Id. PP 

37-38, 42. In its view, San Francisco was to blame for delays, 

which were “largely a consequence of requesting 

interconnection for projects with [demands] greater than what 

PG&E has normally accepted for secondary service” and “San 

Francisco’s own delays in responding to PG&E.” Id. PP 39-

40. The Commission denied San Francisco’s request for 

rehearing. Order Addressing Arguments Raised on Rehearing, 

172 FERC ¶ 61,021 (2020) (Rehearing Order). 

San Francisco petitions for review of the Order and 

Rehearing Order (collectively, the “Voltage Orders”).

B.

San Francisco contends in petitioning for review that (1) 

the Commission’s Voltage Orders were arbitrary and 

capricious in deeming PG&E’s secondary-service practice just 

and reasonable, (2) the Commission failed to meet its mandate 

under the FPA to prevent undue discrimination, and (3) the 

Voltage Orders are inconsistent with PG&E’s Tariff and the 

filed-rate doctrine.

1.

As a threshold matter, PG&E maintains that San 

Francisco’s first and second challenges are moot in light of 

PG&E’s proposal of a revised tariff that offers only primary 

service. Thus, ruling in San Francisco’s favor on either of the 

two issues would have no remedial effect, it claims, because 

PG&E “no longer has discretion . . . to allow secondary voltage 
9

interconnections.” PG&E Br. 15. PG&E concedes that San 

Francisco’s claim that PG&E violated its original tariff is not 

moot because retrospective relief is still available. PG&E Br. 

19. PG&E’s mootness argument is unpersuasive given the 

provisional nature of the proposed tariff revision. 

A “case is moot if the dispute is no longer embedded in 

any actual controversy about the plaintiffs’ particular legal 

rights.” Already, LLC v. Nike, Inc., 568 U.S. 85, 91 (2013) 

(internal quotation marks omitted). San Francisco petitioned

for review of the Order denying its complaint on August 17, 

2020. On September 15, 2020, PG&E filed proposed tariff 

changes, which the Commission accepted on November 13, 

2020, while expressing no view on whether the revised tariff 

was just, reasonable, and nondiscriminatory. Pac. Gas & Elec. 

Co., 173 FERC ¶ 61,140 at P 42 (2020). The Commission 

suspended the proposed revisions for five months, to be 

effective April 15, 2021, and ordered an evidentiary hearing on 

its legality. Id. The hearing was held in abeyance to encourage 

settlement discussions, which, as of November 23, 2021, are 

ongoing. Status Report of Settlement Judge, FERC Docket No. 

ER20-2878 (Nov. 23, 2021). 

The Commission’s “[a]cceptance of a filing decides 

nothing concerning the merits of a case; it merely reserves the 

issues pending a hearing.” Papago Tribal Util. Auth. v. FERC, 

628 F.2d 235, 240 (D.C. Cir. 1980). There, the court held that 

the Commission’s refusal to reject a rate filing was an 

interlocutory decision that was not final, reviewable agency 

action. Id. Under PG&E’s logic, a utility could moot any 

challenge to its conduct by filing a revised tariff with the 

Commission that would require that conduct. Because the 

Commission has not ruled on the legality of the revised tariff, 

and because San Francisco also seeks retrospective relief, its 

claims are not moot.
10

2.

Turning to the merits, San Francisco contends that the 

Commission did not identify any “safety or reliability risks” 

that would arise from providing secondary-voltage service to 

San Francisco. SF Br. 28. Rather, it maintains that the 

Commission “offers only vague conclusory statements about 

PG&E’s general need to assure safety and reliability,” which 

are not grounds on which the Voltage Orders can be upheld. 

Id. at 29. 

The court reviews the Commission’s orders under the 

arbitrary and capricious standard. See, e.g., Emera Me. v. 

FERC, 854 F.3d 9, 21 (D.C. Cir. 2017). A court “must uphold 

a rule if the agency has ‘examine[d] the relevant 

[considerations] and articulate[d] a satisfactory explanation for 

its action[,] including a rational connection between the facts 

found and the choice made.” FERC v. Elec. Power Supply 

Ass’n, 577 U.S. 260, 292 (2016) (quoting Motor Vehicle Mfrs. 

Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 

29, 43 (1983)). 

PG&E identified two concerns in its Answer to the 

Complaint. First, the request for secondary-voltage service 

might be too far from the necessary infrastructure. Answer to 

Complaint at 6. Second, secondary-voltage equipment lacks 

unique operating numbers, making it more difficult to service. 

Id. at 16. The Commission’s Voltage Orders, however, do not 

reference any specific risks to safety or reliability with respect 

to San Francisco’s requests. The Commission concluded only 

that PG&E is “ultimately responsible for the safety and 

reliability of its distribution system” and should have 

“discretion to determine what level of service is both 

appropriate and available based upon the status and 
11

configuration of its . . . facilities and the nature and location of 

the interconnection request.” Order P 38. For support, the 

Commission cites page 6 of PG&E’s Answer without 

explanation. Id. P 38 n.82. 

The Commission’s “passing reference to relevant factors,” 

such as safety and reliability, “is not sufficient to satisfy the 

Commission’s obligation to carry out ‘reasoned’ and 

‘principled’ decisionmaking.” Mo. Pub. Serv. Comm’n v. 

FERC, 234 F.3d 36, 41 (D.C. Cir. 2000). That is so when the 

Commission refers only generally to safety and reliability 

without explaining what the risks are, much less examining 

PG&E’s claims. A declaration by PG&E engineer Michael 

Thibault stated that “interconnection at the secondary voltage 

level between utilities is not at all typical and . . . is not ‘Good 

Utility Practice,’” and that “secondary interconnections 

between utilities create ambiguity and operational and 

engineering challenges.” Order P 37 n.79 (citing Answer to 

Complaint, Thibault Decl. ¶¶ 11-12). Although this suggests 

that providing secondary service to a utility may present 

challenges for PG&E, the declaration does not concretely 

describe the challenges with respect to San Francisco’s 

requests for secondary service. 

Further, the Commission’s conclusion that PG&E should 

have discretion to determine which voltage level is most 

appropriate is belied by the record to the extent PG&E would 

apply a categorical rule. The July 1, 2019 Letter hardly 

indicates that PG&E intends to evaluate San Francisco’s 

applications on a case-by-case basis. See July 1, 2019 Letter at 

3. Although the Commission viewed PG&E’s statement to be 

“primarily in reference to specific projects” and that San 

Francisco’s concerns about being denied accommodations 

were “speculative,” Order P 40 n.90, the Commission cited no 

portion of the Letter that limits its relevance to specific projects 
12

and provided no reason that a “long-term solution” is possible 

or probable.

San Francisco also contends that the Commission was 

arbitrary and capricious in concluding that PG&E may deny 

secondary-voltage service to San Francisco because the 

industry norm for utility-to-utility interconnections is primary 

voltage. Here, it contends that the Commission failed to 

address the fact that San Francisco interconnects to PG&E at 

numerous small points of interconnection, rather than a few 

large points as is typical for a utility-to-utility interconnection. 

Reply to Answer at 15-16; Request for Rehearing at 30-31. 

Neither of the Voltage Orders explain why deference to 

industry norms is reasonable in light of San Francisco’s 

geographical configuration, which differs from that of other 

utilities. See Request for Rehearing at 30-31. Rather, the 

Commission applied the industry norm with no explanation 

beyond stating that such norms “inform expectations.” 

Rehearing Order P 9 n.23. Maybe so. But the Commission 

does not explain why San Francisco should have expected to 

be bound by an industry norm involving much higher demands 

than it has historically required, or why its expectations are a 

valid basis for PG&E’s denials of its requests. Again, the

Commission’s passing reference to “ambiguity and operational 

or engineering challenges” arising from secondary 

interconnections between utilities without further elaboration, 

does not provide sufficient justification for its conclusion. 

Order P 37 n.79 (citing Answer to Complaint, Thibault Decl. 

¶¶ 11-12). Consequently, the Voltage Orders do not satisfy

arbitrary-and-capricious review. See State Farm, 463 U.S. at 

43.
13

3.

Additionally, San Francisco contends that the Commission 

failed to meet its mandate to prevent undue discrimination, 

because PG&E offers secondary service to two wholesale 

customers, Western and the Pooling Authority, at higher 

voltages than 75 kW, and to retail customers at voltages up to 

3,000 kW. When faced with a claim of undue discrimination, 

the Commission “must reasonably explain how the existing 

suppliers and new entrants are not similarly situated and in 

what respects the reasons are material.” New Eng. Power 

Generators Ass’n v. FERC, 881 F.3d 202, 213 (D.C. Cir. 2018) 

(citing Edison Mission Energy, Inc. v. FERC, 394 F.3d 964, 

968-69 (D.C. Cir. 2005)). 

The Commission has adequately explained why San 

Francisco is not similarly situated to Western and the Pooling 

Authority, noting that both of them receive secondary service 

under settlement agreements with PG&E, and that the Pooling 

Authority is not eligible for Tariff service. Order P 37 & n.79. 

Western’s settlement “reflects a bargained-for agreement 

between PG&E & Western,” and San Francisco has not shown 

that it and its customers are similarly situated to Western and 

its customers. Id. P 42. But the Commission’s response to San 

Francisco’s claims regarding retail customers was inadequate. 

On the other hand, the Commission views “a retail-level 

standard . . . [a]s not necessarily congruent with the 

requirements of interconnecting wholesale customers such as 

San Francisco,” id. P 38, and that San Francisco’s “mere 

assertion of [the retail standard’s] relevance is not sufficient to 

satisfy San Francisco’s section 206 burden of proof,” 

Rehearing Order P 13. Beyond asserting “relevance,” San 

Francisco cited instances when its customers began retail 

service with PG&E during San Francisco’s wholesale service 

negotiations with PG&E. See Complaint, Hale Decl. ¶¶ 25-30. 
14

The Commission accepted PG&E’s explanation that these San 

Francisco customers only took temporary retail construction 

power service from PG&E, Order P 40, but this fact confirms 

that PG&E can compete with San Francisco through its retail 

offerings. The Commission’s conclusion that retail service is 

“not necessarily congruent” does not meet its burden of 

reasoned decision-making. 

4.

San Francisco further contends that the Voltage Orders are 

inconsistent with the terms of PG&E’s Tariff, which it 

interprets to require PG&E to provide secondary-voltage 

service whenever requested, and that PG&E’s contrary practice 

violates the filed-rate doctrine. The filed rate objection is more 

problematic. 

a. 

When San Francisco filed its petition, PG&E’s Tariff 

stated that PG&E will “provide Distribution Service pursuant 

to the applicable terms and conditions contained in this Tariff 

and Service Agreement.” Tariff § 1.2. After receiving an 

application for service, PG&E must “make a determination of 

available distribution capacity.” Tariff § 15.5. Section 13.4 of 

the Tariff stated:

If the Distribution Provider determines that it 

cannot accommodate a Completed Application 

for Distribution Service because of insufficient 

capability on its Transmission System or 

Distribution Facilities, the Distribution Provider 

will use due diligence to expand or modify its 

Distribution System to provide the requested 

Distribution Service, provided the Distribution 
15

Customer agrees to compensate the Distribution 

Provider for such costs . . . .

San Francisco thus alleged that because the Tariff defines 

“Distribution System” to include the secondary distribution 

system, Complaint at 23 (citing Tariff § 11), PG&E must 

expand its secondary distribution system to meet any customer 

request for secondary-voltage service, pursuant to Tariff 

Section 13.4. 

The Commission concluded that “[w]hile the [Tariff] does 

not preclude a [Tariff] customer from requesting the level of 

service that it wishes to take,” PG&E should retain “discretion 

to determine what level of service is both appropriate and 

available based upon the status and configuration of its existing 

. . . facilities and the nature and location of the interconnection 

request.” Order P 38. As a result, “PG&E has not violated the 

terms of the [Tariff].” Id. P 35. The court has long held that 

the Commission’s interpretation of a tariff receives “Chevronlike deference.” Consol. Edison Co. of New York v. FERC, 347 

F.3d 964, 972 (D.C. Cir. 2003) (internal citations omitted). If 

the terms of the tariff are unambiguous, the court need not defer 

to the Commission’s interpretation. If the text is ambiguous, 

there the court must defer if the Commission’s interpretation is 

reasonable. Id. The Tariff then in effect unambiguously 

confirms the Commission’s interpretation. Although PG&E 

must use due diligence to adjust its system to provide the 

“requested Distribution Service,” Tariff § 13.4, “Distribution 

Service” is defined as “[t]he transporting of electric power over 

and through various PG&E facilities for delivery to a 

Distribution Customer.” Tariff § 2.15. The fact that PG&E 

must provide wholesale distribution service when requested 

does not necessarily imply that it is required to provide the 

voltage San Francisco requests.
16

b. 

On the other hand, San Francisco correctly notes that 

PG&E’s practice of requiring primary-voltage service for 

demands above 75 kW is not stated in its Tariff and therefore 

may violate the filed-rate doctrine. Under that doctrine, 

“utilities are forbidden to charge any rate other than the one on 

file with the Commission,” West Deptford Energy LLC v. 

FERC, 766 F.3d 10, 12 (D.C. Cir. 2014), a prohibition that is 

understood to extend to other utility practices that affect rates 

and service. See Keyspan-Ravenswood, LLC v. FERC, 474 

F.3d 804, 811 (D.C. Cir. 2007). The “rule of reason” requires

“utilities [to] file ‘only those practices that affect rates and 

service significantly, that are realistically susceptible of 

specification, and that are not so generally understood in any 

contractual arrangement as to render recitation superfluous.’” 

Id. (quoting City of Cleveland v. FERC, 773 F.2d 1368, 1376 

(D.C. Cir. 1985)). Contrary to PG&E’s view, San Francisco did 

not waive this argument but, in fact, raised it in requesting

rehearing. See Request for Rehearing at 11-12; see also Reply 

to Answer at 8-9. But see PG&E Br. 25 (citing 16 U.S.C. § 

825l(b); Allegheny Power v. FERC, 437 F.3d 1215, 1220 (D.C. 

Cir. 2006)). 

On rehearing, the Commission stated that the 75 kW 

threshold is merely a “guidepost,” Rehearing Order P 10, while 

reaffirming its position that PG&E makes case-by-case 

determinations of which voltage to provide, Order P 43 & n.96. 

Yet, as noted, the record suggests that PG&E intends to apply 

a categorical rule going forward. July 1, 2019 Letter at 3; 

Answer to Complaint at 30. Even if the 75 kW threshold is a 

guidepost, however, that kind of numerical threshold is the type 

of requirement that the “rule of reason” requires be stated in the 

Tariff, as a numerical threshold is “realistically susceptible of 

specification,” Keyspan-Ravenswood, 474 F.3d at 811. 
17

PG&E’s policy significantly “affect[s] rates and service”

because it affects which voltage level San Francisco may 

receive, and different voltages have different rates. Id. It also 

cannot be “so generally understood . . . as to render recitation 

superfluous,” given PG&E’s secondary-voltage connections 

for demands above 75 kW and its provision of secondaryvoltage service to San Francisco prior to the 2015 transition to 

Tariff service. Id. Although primary voltage may be the 

industry norm for utility-to-utility interconnections, and PG&E 

should have discretion to provide secondary voltage on a caseby-case basis, see Order P 43, the Commission does not explain 

why these factors exempt the guidepost from specification in 

the Tariff under the “rule of reason.”

Because the Commission did not adequately explain any 

operational or engineering rationale justifying PG&E’s 75 kW 

“guidepost” and did not explain why that guidepost did not 

need to be in the filed tariff, the court vacates the Voltage 

Orders and remands the case to the Commission for further 

proceedings consistent with this opinion.

III.

San Francisco’s complaint in No. 20-1084 concerns the 

proper interpretation of a section of PG&E’s Tariff on 

grandfathering. 

A.

Section 14.2 requires customers to demonstrate “bona fide 

ownership or control of . . . Intervening Distribution Facilities 

. . . except in the case where an Eligible Customer meets the 

criteria for grandfathering in 16 USC § 824k(h)(2) [Section 

212(h)(2) of the FPA]” (emphasis added). This section was 

added as the result of a 2015 Commission-approved settlement 
18

between PG&E and its Tariff customers. Offer of Settlement, 

FERC Docket No. ER13-1188-037, eLibrary No. 20150331-

5502 (Mar. 31, 2015). Although PG&E and San Francisco 

agree that PG&E is bound by Section 212(h)(2) of the FPA, 16 

U.S.C. § 824k(h)(2), they disagree about its scope. 

On October 9, 2014, San Francisco filed a complaint with 

the Commission alleging, among other claims, that PG&E was 

improperly denying Tariff service to some of San Francisco’s 

delivery points. San Francisco argued that PG&E was required 

to serve any San Francisco customer served in 1992, regardless 

of whether the customer stayed at the same location. 

Complaint at 18-20. PG&E responded that it would serve any 

of San Francisco’s locations that it had served in 1992 but 

would not serve delivery points of 1992 customers that had 

relocated or opened new locations. Answer to Complaint at 

35-36 .

FPA Section 212(h) provides:

No order issued under this chapter shall be 

conditioned upon or require the transmission of 

electric energy:

(1) directly to an ultimate consumer, or

(2) to, or for the benefit of, an entity if such 

electric energy would be sold by such entity 

directly to an ultimate consumer, unless:

(A) such entity is a . . . State or any political 

subdivision of a State (or an agency, authority, 

or instrumentality of a State or a political 

subdivision) . . . [listing other categories]; and
19

(B) such entity was providing electric service to 

such ultimate consumer on October 24, 1992, or 

would utilize transmission or distribution 

facilities that it owns or controls to deliver all 

such electric energy to such electric consumer. 

(emphasis added)

On December 23, 2014, PG&E filed with the Commission 

a proposed replacement agreement under which PG&E would 

provide Tariff service to any San Francisco delivery point that 

received service in 1992. Proposed Service Agreement, App. 

C. So any delivery point that did not receive service in 1992 

but did receive service in 2015 (when the bilateral agreement 

would expire) would receive what PG&E calls Tariffequivalent service, if the delivery point was a “municipal load,” 

id., App. D. PG&E defined “municipal load” as: 

“Municipal Public Purpose End-Use Customers” 

(“Muni Load”) are served at metered Points of 

Delivery providing power to [San Francisco’s] 

governmental departments and agencies, public 

housing tenants, municipal transportation system, 

police stations, fire departments, public schools, 

city parks and public libraries. Nongovernmental private persons (other than [San 

Francisco] public housing tenants) and nongovernmental private corporations are not 

Municipal Public Purpose End-Use Customers. 

Small Unmetered Street Loads served under 

Appendix E [such as streetlights or traffic 

signals] are not Municipal Public Purpose EndUse Customers.

Id., App. D § D.1.1. Non-municipal loads served in 2015 but 

not in 1992 would receive Tariff-equivalent service if the 
20

delivery point continues to serve the same end-use customer as 

in 2015 and the electricity demand does not exceed 125 percent 

of the customer’s average annual demand on June 30, 2015. 

Id., App. D §§ D.1.2, D.2. 

An Administrative Law Judge interpreted FPA 

Section 212(h)(2)(B) in light of the Commission’s decision in

Suffolk County Electric Agency, 96 FERC ¶ 61,349, at 62,301 

(Nov. 15, 2001). There, the Commission concluded that 

Section 212(h) grandfathered the “class of customers eligible 

to receive service.” Id. The ALJ determined that “the 

Commission’s orders and opinions . . . support San Francisco’s 

argument that grandfathering applies to the class of customers 

that was eligible to receive wholesale distribution service on 

October 24, 1992, regardless of where in the City those 

customers may be located now or in the future.” Initial 

Decision P 135 (internal citations omitted). Therefore, the ALJ 

defined the “class” of customers as all “municipal public 

purpose load[s].” Id. P 142. He also concluded that he was

“without authority” to define a “municipal public purpose” for 

the Commission. Id. P 146. 

In Opinion No. 568, the Commission reversed. 169 FERC 

¶ 61,128 at P 67 (Nov. 21, 2019). Distinguishing its FPA 

Section 212(h) precedent as involving proceedings seeking an 

order of mandatory service under FPA §§ 210 and 211, the 

Commission noted that San Francisco filed its complaint under 

§ 206 and PG&E filed its proposed replacement agreements 

under § 205, id. P 67 n.154. Further, the Commission stated 

that it was not “interpreting the scope of section 212(h),” but 

instead only interpreting PG&E’s Tariff. Id. Noting that other 

provisions of the Tariff referenced “points of delivery,” the 

Commission viewed the “points of delivery framework” to 

favor PG&E’s interpretation of Section 14.2. Id. PP 69-70. By 

contrast, in the Commission’s view, San Francisco’s 
21

interpretation “would automatically grandfather all San 

Francisco customers, thereby negating the point of delivery 

framework.” Id. P 69. The Commission also accepted PG&E’s 

definition of “municipal load” as “effectively distinguish[ing]

between what is to be considered municipal load . . . and what 

is not.” Id. P 72. In denying San Francisco’s petition for 

rehearing, the Commission offered a clarification, stating that

PG&E’s interpretation of the Tariff was consistent with Suffolk 

County’s “class-based approach” because PG&E was still 

providing service to the “class of customer [San Francisco] was 

appropriately serving as of October 24, 1992,” but “only for the 

universe of delivery points as they existed on June 30, 2015.” 

Rehearing Order, 171 FERC ¶ 61,196 at P 28 (June 4, 2020).

 

San Francisco petitions for review of Opinion No. 568 and 

the Rehearing Order (collectively, the “Grandfathering 

Orders”). The Court accords the Commission’s interpretation 

of filed tariffs Chevron-like deference. See supra Subsection 

II.B.4.a. Although the Court will defer to the Commission’s 

interpretation of its own precedent, the Commission must 

acknowledge that it is departing from its precedent and provide 

a reasoned explanation indicating that prior policies and 

standards are being deliberately changed, not casually ignored. 

ESI Energy, LLC v. FERC, 892 F.3d 321, 329 (D.C. Cir. 2018).

A.

Section 14.2 of the Tariff provides, by its plain terms, an 

exception to the required ownership or control of intervening 

Distribution facilities for customers that “meet[] the criteria for 

grandfathering in 16 USC § 824k(h)(2).” The text

unambiguously indicates that the Tariff incorporates the 

requirements of FPA Section 212(h)(2). The parties had agreed 

in a Joint Brief to the Commission that they “referenced 

Section 212(h) of the FPA to define the requirements and 
22

boundaries of eligibility for service under PG&E’s [Tariff],” 

and that “[t]he intent of [that reference] in the [Tariff] as it 

pertains to grandfathering was to ensure that the Commission’s 

interpretation of the statute was incorporated into the [Tariff’s]

eligibility rules.” Joint Brief at 2-3 (Sept. 24, 2018). The 

Commission, however, expressly disclaimed that it was

“interpreting the scope of [Section] 212(h) or the precedent 

thereunder beyond the salient point that they are not applicable 

in this [Section 206] proceeding.” Opinion No. 568 P 67 n.154. 

Because the Commission based its decision in Opinion No. 568 

on requirements other than those in Section 212(h), the court 

owes no deference to its interpretation of unambiguous Tariff 

text.

The Commission’s attempts to defend its interpretation are 

unpersuasive. First, the Commission states that “the [Tariff] 

frames [PG&E’s] distribution service in terms of delivery 

points,” and that service should therefore be grandfathered on 

a location-by-location basis. Opinion No. 568 P 70 & n.160. 

Tariff Section 14.2 itself requires applicants to prove that the 

criteria of FPA Section 212(h)(2) are met “for each Point of 

Delivery,” and Tariff Section 15.5.1 states that a distribution 

provider may reject service on the ground that “it disputes that 

the Point of Delivery qualifies.” That the Tariff references 

“points of delivery” does not necessarily imply that only 

specific points of delivery may be grandfathered, and those

references to “points of delivery” do not change the fact that 

the Tariff expressly references the criteria of Section 212(h)(2). 

Second, the Commission views PG&E’s narrow 

interpretation of Section 212(h)(2) to employ the class-based 

approach used by the Commission in Suffolk County because it 

effectively grandfathers “each delivery point it was serving (as 

of June 30, 2015), as long as the customer at that delivery point 

is a member of the class of customer [San Francisco] was 
23

appropriately serving as of October 24, 1992.” Rehearing 

Order P 28 (quoting PG&E Brief on Exceptions at 13-14). This 

is true in the sense that PG&E has proposed to provide Tariff 

service or Tariff-equivalent service to all municipal loads it 

served in 2015. But this is not the same as ruling those loads 

are Tariff-eligible. PG&E’s voluntary accommodations for the

excluded delivery points do not justify the Commission’s 

interpretation of the Tariff, and the Commission acknowledged 

that applying Suffolk County supports San Francisco’s 

approach. Opinion No. 568 P 69. 

Third, the Commission viewed San Francisco’s 

interpretation of the grandfathering exception to render Section 

14.2 meaningless, “because all customers within the class of 

customers taking service on October 24, 1992 would be 

grandfathered in perpetuity.” Rehearing Order P 24. Not so. 

Under San Francisco’s interpretation, PG&E’s customers must 

satisfy the criteria of Section 212(h)(2) to qualify for 

grandfathering: be an eligible entity that served end-use 

customers as of October 24, 1992. Any end-use customers San 

Francisco did not serve in 1992 could not qualify for the 

Section 14.2 exception.

Fourth, as PG&E notes, the court will generally defer to 

the Commission’s interpretation of its own precedent. But not

when the Commission “depart[s] from those rulings without 

provid[ing] a reasoned analysis indicating that prior policies 

and standards are being deliberately changed, not casually 

ignored.” ESI Energy, 892 F.3d at 329 (internal quotation 

marks and citation omitted). The Commission attempts to 

distinguish its precedent on the ground that San Francisco filed 

its complaint under FPA § 206 while the cases in Suffolk 

County concerned proceedings for mandatory interconnection 

under FPA §§ 210 and 211. Opinion No. 568 P 67 n.154. Here, 

however, the Commission expressly declined to interpret 
24

Section 212(h), ignoring the unambiguous terms of the Tariff. 

Id. Even interpreting the Grandfathering Orders to create 

different interpretations of Section 212(h) for § 210 and 211

proceedings and another for § 205 and 206 proceedings, the 

Commission failed to explain why Section 212(h)(2)’s criteria 

would have different meanings in those contexts. 

B.

San Francisco also contends that the Commission was 

arbitrary and capricious in accepting PG&E’s definition of 

“municipal load” because it excludes from grandfathering 

certain customers that were receiving service in 1992. Under 

the Commission’s Section 212(h) precedent, the Tariff’s 

grandfathering clause covers “the class of customers eligible to 

receive service” on October 24, 1992. Suffolk County, 96 

FERC ¶ 61,349, at 62,301 (2001). That is, the Tariff allows 

grandfathering of a customer San Francisco served under the 

prior interconnection agreement even though that customer 

seeks Tariff service at a new delivery point. Therefore, the 

court must address whether the Commission’s definition of

“municipal load” excludes customers San Francisco served 

prior to the grandfathering date.

As noted, the Commission accepted PG&E’s definition 

because it “effectively distinguishes between what is to be 

considered municipal load . . . and what is not,” and that 

although PG&E’s definition of “municipal load” differed from 

the definition in San Francisco and PG&E’s 1987 bilateral 

agreement, “a new contract may well have new terms and 

definitions.” Opinion No. 568 P 72; see Rehearing Order PP 

33-34. True, but the Commission’s analysis of “municipal 

load,” like its interpretation of Section 14.2 of the Tariff, failed

to address the grandfathering criteria of Section 212(h)(2), 

much less the Commission’s precedent interpreting it. The 
25

Commission acknowledged that Suffolk County would require 

grandfathering of a customer San Francisco served under the 

prior interconnection agreement in 1992 even though that 

customer seeks Tariff service at a new delivery point. Opinion 

No. 568 P 69. And the Commission expressly accepted 

PG&E’s definition to “describe the class of customers that San 

Francisco was serving as of October 24, 1992.” Rehearing 

Order P. 18. Yet PG&E’s definition would exclude entities 

served in 1992, including private parking garages on City 

property, tenants at San Francisco International Airport, and 

SOMArts, a neighborhood arts program partially funded by the 

San Francisco Arts Commission. See Ex. SF-2 at 14, 15; Ex. 

SF-6 at 7-11; Ex. PGE-5 at 10. Because the Commission’s 

Grandfathering Orders do not acknowledge the conflicts 

between PG&E’s definition of “municipal load” and its own 

precedent interpreting Section 212(h)(2) criteria, the 

Grandfathering Orders are arbitrary and capricious. 

Finally, the court notes that the orders on review present a 

troubling pattern of inattentiveness to potential anticompetitive effects of PG&E’s administration of its openaccess Tariff. More than a century ago, Congress authorized 

the Hetch Hetchy System not only to provide San Francisco 

with a source of cheap power but also to ensure competition in 

its retail power market. Faced with claims that PG&E was 

frustrating that competition by treating its own retail service 

preferentially and refusing service for customers San Francisco 

had served for decades, the Commission fell short of meeting 

its “duty” to ensure that rules or practices affecting wholesale 

rates are “just and reasonable.” Elec. Power Supply Ass’n, 577 

U.S. at 277.

Accordingly, the court grants San Francisco’s petitions 

challenging the Voltage Orders in No. 20-1313 and the 

Grandfathering Orders in No. 20-1084, vacates those orders, 
26

and remands to the Commission for further proceedings

consistent with this opinion.