United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 7, 2008 Decided December 30, 2008 

No. 07-1175 

LOUISIANA PUBLIC SERVICE COMMISSION, 

PETITIONER

v. 

FEDERAL ENERGY REGULATORY COMMISSION, 

RESPONDENT

ARKANSAS PUBLIC SERVICE COMMISSION, ET AL., 

INTERVENORS

On Petition for Review of Orders 

of the Federal Energy Regulatory Commission 

Michael R. Fontham argued the cause for petitioner. 

With him on the briefs were Paul L. Zimmering, and Noel J. 

Darce. 

Carol J. Banta, Attorney, Federal Energy Regulatory 

Commission, argued the cause for respondent. With her on 

the brief were Cynthia A. Marlette, General Counsel, and 

Robert H. Solomon, Solicitor. 
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J. Wayne Anderson argued the cause for intervenors. On 

the brief were Mary Woodford Cochran, Paul Randolph 

Hightower, Ted Joseph Thomas, Clinton A. Vince, Orlando E. 

Vidal, William S. Scherman, and Gregory W. Camet. Emma 

F. Hand entered an appearance. 

Before: ROGERS, TATEL, and KAVANAUGH, Circuit 

Judges. 

 Opinion for the Court filed by Circuit Judge TATEL. 

 

 TATEL, Circuit Judge: Over the Louisiana Public Service 

Commission’s objection, the Federal Energy Regulatory 

Commission approved a new long-term allocation of powergenerating capacity among the affiliates of the Entergy 

system. In so doing, FERC interpreted the provision of the 

Entergy System Agreement that governs off-system sales as 

inapplicable to short-term opportunity sales. Aggrieved by 

FERC’s decision approving the long-term, intra-system 

allocations and upset at FERC’s interpretation regarding the 

short-term, off-system sales, the Louisiana Commission 

petitions for review on both issues. Yet the only issue before 

us on which FERC actually took action was the approval of 

Entergy’s long-term allocations, making that the only issue 

we have jurisdiction to decide. Finding it easily resolved by 

our standard of review, we deny the petition. 

I. 

 Because we have dealt many times with the Entergy 

system and its predecessors, most recently in Louisiana 

Public Service Commission v. FERC (“Louisiana 2008”), 522 

F.3d 378 (D.C. Cir. 2008), we describe it here only briefly. 

Entergy is a multi-state affiliation of power companies that 

share the costs and benefits of power generation. At all times 

relevant to this appeal, it consisted of five affiliates: Entergy 
3 

Louisiana, Entergy Gulf States, Entergy New Orleans, 

Entergy Mississippi, and Entergy Arkansas. The affiliation is 

governed by the Entergy System Agreement, and although 

that agreement creates an integrated system, it allots to each 

affiliate the primary responsibility for and benefit from the 

generation facilities in the affiliate’s jurisdiction. Because 

these facilities run on different fuels, shifts in the relative 

price of coal, gas, and nuclear energy can create striking cost 

disparities among the affiliates. To balance such disparities, 

we have long viewed the System Agreement as requiring that 

affiliates share the costs of power generation in roughly equal 

proportion. See, e.g., Miss. Indus. v. FERC, 808 F.2d 1525, 

1554–55 (D.C. Cir. 1987). The Entergy System has 

accomplished this rough equalization primarily through 

careful allocation of new generation capacity. As an 

“insurance policy” should long-term allocation plans fail to 

achieve proper cost-spreading, however, FERC recently 

adopted a “bandwidth remedy” that limits any relative cost 

discrepancies plus or minus 11 percent. Entergy Servs., Inc., 

111 F.E.R.C. ¶ 61,311, at 62,356 (2005). We approved that 

remedy in Louisiana 2008, 522 F.3d at 391. 

 Facing a complaint from New Orleans, which was 

bearing unusually high production costs, Entergy submitted to 

FERC a proposed reallocation of generating capacity. See 

Entergy Servs., Inc. (“Opinion No. 485”), 116 F.E.R.C. 

¶ 61,296, at 62,485 (2006). Under the proposed allocations, 

Entergy Arkansas and Entergy Gulf States would “sell” their 

cheaper generation capacity to Entergy New Orleans and 

Entergy Louisiana, id. at 62,486 & nn.14–15, thereby 

allowing New Orleans to pass costs from its more expensive 

generators on to the now-undersupplied Entergy Gulf States. 

These paper transfers of power would lower costs for New 

Orleans and Louisiana but raise costs for Gulf States. 

Representing Gulf States’s customers, the Louisiana 
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Commission thus opposed the allocations as discriminatory. 

The same administrative law judge who presided over the 

extensive bandwidth proceedings approved the allocations, 

Entergy Servs., Inc. (“Initial Decision”), 111 F.E.R.C. 

¶ 63,077 (2005), and FERC affirmed that decision in relevant 

part, both on exceptions from the initial decision, Opinion No. 

485, 116 F.E.R.C. ¶ 61,296, and on petition for rehearing, 

Entergy Servs. Inc. (“Opinion No. 485-A”), 119 F.E.R.C. 

¶ 61,019 (2007). 

 In the course of these proceedings, the Louisiana 

Commission discovered that Entergy Arkansas had been 

selling cheap energy off system through a series of monthlong opportunity transactions without offering the other 

Entergy affiliates first bite at those electrons. The Louisiana 

Commission believed this a violation of section 3.05 of the 

System Agreement, which provides: 

It is the long term goal of the Companies that each 

Company have its proportionate share of Base 

Generating Units available to serve its customers 

either by ownership or purchase. Any Company 

which has generating capacity above its 

requirements, which desires to sell all or any portion 

of such excess generating capacity and associated 

energy, shall offer the right of first refusal for this 

capacity and associated energy to the other 

Companies under Service Schedule MSS-4 Unit 

Power Purchase. 

Entergy System Agreement § 3.05 (2000). Although for 

several reasons the ALJ thought that the short-term, offsystem sales were irrelevant to the long-term, intra-system 

allocation issue before him, he also doubted whether it would 

be sensible to apply this section of the System Agreement to 
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short-term opportunity sales at all. Initial Decision, 111 

F.E.R.C. at 65,429–30. On exceptions, FERC agreed that any 

possible section 3.05 violation had nothing to do with the 

long-term allocation issue. But echoing the ALJ’s doubts, 

FERC also said that “section 3.05 was not triggered by the 

one-month capacity sales.” Opinion No. 485, 116 F.E.R.C. at 

62,505. Believing that FERC had authorized the repeated sale 

of cheap energy off system, the Louisiana Commission 

pressed this issue on rehearing. There, FERC reaffirmed its 

view that any short-term sale violation had no import for the 

long-term allocation question actually before it, Opinion No. 

485-A, 119 F.E.R.C. at 61,062–63, but this time it went on to 

explain in detail why section 3.05 of the System Agreement 

just shouldn’t apply to short-term sales, id. 

 Before us the Louisiana Commission gives this 

apparently ancillary short-term sale dispute pride of place, 

arguing it first and resisting any attempt to connect it to the 

long-term allocation issue on which Entergy initiated these 

FERC proceedings. As the Louisiana Commission sees it, 

“[t]he short term sale issue has substance independent of the 

resource allocation” because “FERC’s unnecessary holding 

on the point authorizes Entergy to sell cheap System 

resources” in a way that causes the Louisiana Commission’s 

constituents independent harm. Appellant’s Reply Br. 2. 

Because we have no doubt that FERC resolved the long-term 

allocation issue, we consider it first, turning second to the 

question of whether we should consider the short-term sale 

issue at all. 

II. 

Conceding that “minimizing differences in production 

costs is a valid goal of resource allocations among operating 

companies,” Appellant’s Reply Br. 12, the Louisiana 

Commission challenges the long-term allocations approved by 
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FERC as ill-designed to serve that end. It argues that these 

allocations merely inverted the positions of Entergy New 

Orleans and Entergy Gulf States, driving the former’s costs 

down by transferring them to the latter. It argues that FERC 

never studied the likely long-term effects of the allocation and 

that it unduly relied on the backstop provided by the 

bandwidth remedy. Ultimately, it says, the proof is in the 

production costs: following the allocations Entergy New 

Orleans went from about 12 percent above system average to 

about 1 percent below, whereas Entergy Gulf States went 

from about the average cost to about 8 percent above the 

system average. 

 We review FERC’s treatment of this issue with great 

deference. We affirm its orders unless arbitrary or capricious, 

Louisiana 2008, 522 F.3d at 391, and treat its factual findings 

as conclusive if supported by substantial evidence, 16 U.S.C. 

§ 825l(b). Where the subject of our review is, as here, a 

predictive judgment by FERC about the effects of a proposed 

remedy for undue discrepancies among operating companies, 

our deference is at its zenith. See Louisiana 2008, 522 F.3d at 

393 (“We owe FERC great deference in reviewing its 

selection of a remedy . . . .”); Envtl. Action, Inc. v. FERC, 939 

F.2d 1057, 1064 (D.C. Cir. 1991) (“[I]t is within the scope of 

the agency’s expertise to make such a prediction about the 

market it regulates, and a reasonable prediction deserves our 

deference notwithstanding that there might also be another 

reasonable view.”). 

 Given this lenient standard of review, we find ourselves 

unconvinced by the Louisiana Commission’s arguments for 

second-guessing FERC’s judgment. Although the ALJ 

acknowledged an apparent transfer of costs between New 

Orleans and Gulf States, Initial Decision, 111 F.E.R.C. at 

65,432, he found it impossible to attribute the rise in Gulf 
7 

States’s costs to the transfer alone. Indeed, the ALJ pointed 

to considerable record evidence in finding the data 

“inconsistent with the cause and effect correlation argued by 

[the Louisiana Commission].” Id. at 65,434. Among that 

evidence was the fact that because of the size difference 

between the two entities a transfer of capacity creating a six 

percent fall in the costs for New Orleans would create only a 

one percent rise in Gulf States’s costs, and vice versa. Id. at 

65,432, 65,434. The ALJ concluded that the evidence pointed 

to other causes that might have been contributing to a 

disproportionate rise in costs for Gulf States, including 

steadily increasing prices for natural gas. Id. at 65,434. He 

went on to note that Gulf States was slated for its own longterm allocations in the future and reasonably suggested that, 

to the extent these later allocations failed to remedy cost 

discrepancies persisting after the allocations under review, the 

bandwidth remedy created in the prior proceeding ensured a 

minimum level of rough equalization. Id. The ALJ also 

rejected the Louisiana Commission’s alternative proposal as 

failing to address “the most important goal of reducing the 

disparity in relative production costs among the Operating 

Companies.” Id. at 65,433. Thus, in light of the uncertainty 

regarding the source of Gulf States’s cost increases, the 

planned future allocations, and the backstop provided by the 

bandwidth remedy, the ALJ saw no reason “to order a further 

fine-tuning by reallocating long-term life-of-unit shares . . . to 

try perhaps to shift [Gulf States’s] relative percentage down a 

percent or two.” Id. at 65,434. FERC twice affirmed that 

judgment, Opinion No. 485, 116 F.E.R.C. at 62,504; Opinion 

No. 485-A, 119 F.E.R.C. at 61,063–64, and without cause to 

question its reasonableness or its basis in record evidence, we 

likewise affirm. 
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III. 

Although these proceedings began with Entergy’s request 

for approval of its long-term capacity reallocation, the 

Louisiana Commission allocates the bulk of its briefing to 

challenging FERC’s interpretation of the System Agreement’s 

right of first refusal. It seems the Louisiana Commission may 

have originally presented this argument as somehow relating 

to the long-term allocation issue, as the ALJ thought it 

necessary to expressly reject various reasons for connecting 

them. See Initial Decision, 111 F.E.R.C. at 65,430. But it’s 

hard to tell. The Louisiana Commission now completely 

rejects “[t]he efforts of FERC and Entergy to connect the 

issues on appeal,” calling these efforts “nothing but a 

diversion,” Appellant’s Reply Br. 1, and urging us to review 

FERC’s interpretation of the System Agreement on the shortterm sales issue regardless of its disconnect from the longterm allocation dispute. To be sure, the Louisiana 

Commission’s argument regarding FERC’s interpretation of 

section 3.05 was aired before the agency, and FERC has 

strongly signaled its view of how it will likely read that 

section in the future, Opinion No. 485-A, 119 F.E.R.C. at 

61,062–63. Yet because we think it quite clear that FERC 

made no final decision on any claim for relief on the basis of 

a section 3.05 violation, we still have nothing to review. 

 A party may invoke our jurisdiction only if “aggrieved by 

an order issued by the Commission,” 16 U.S.C. § 825l(b), not 

to challenge agency dicta unrelated to the order actually 

entered in the particular case. See Am. Gas Ass’n v. FERC,

912 F.2d 1496, 1520 (D.C. Cir. 1990) (denying review of 

FERC’s gratuitous statement of law where only injury was 

possible deference to this remark in future proceedings). 

Indeed, unless the party challenges an actual FERC order, that 

party lacks the requisite injury to support Article III standing. 

As we said in Sea-Land Service, Inc. v. Department of 
9 

Transportation, 137 F.3d 640 (D.C. Cir. 1998), “mere 

precedential effect within an agency is not, alone, enough to 

create Article III standing, no matter how foreseeable the 

future litigation.” Id. at 648. Thus, the Louisiana 

Commission cannot establish standing simply by claiming 

that FERC apparently authorized future off-system 

opportunity sales by construing the System Agreement’s right 

of first refusal as failing to reach such sales in an unrelated 

proceeding. For us to have Article III jurisdiction, the 

Louisiana Commission must instead point to some relief that 

FERC either granted or failed to grant in a proceeding where 

such relief was actually at issue. 

 The Louisiana Commission has given us no reason to 

believe that we are reviewing such a proceeding here. 

Entergy initiated this FERC docket to secure approval of its 

long-term allocations. Neither the Hearing Order listing the 

matters before the ALJ nor FERC’s summary of what it 

decided mentions the short-term sale issue. Opinion No. 485, 

116 F.E.R.C. at 62,485. Counsel for the Louisiana 

Commission admitted at oral argument that at their inception 

FERC’s proceedings concerned this issue not at all and that 

FERC had no need to pass upon it. Oral Arg. 3:06, 7:06. In 

response, FERC counsel freely conceded that FERC’s 

statements on the short-term sale issue amounted to nothing 

more than non-binding dicta—to be accepted or rejected by 

FERC as appropriate in a future docket where such sales are 

properly in dispute. Id. at 12:20. Accordingly, we conclude 

that these statements are in fact dicta and do not preclude the 

Louisiana Commission from pressing this issue in a different 

proceeding. Under these circumstances, Article III of the 

Constitution allocates us no power of review. In this respect, 

then, the petition is dismissed; in all others, it is denied. 

So ordered.