Opinion ID: 4530323
Heading Depth: 2
Heading Rank: 2

Heading: Placement in Zone 19

Text: NPPD argues that FERC acted in an arbitrary and capricious manner because it did not consider the effects of placing Tri-State in Zone 19. Specifically, NPPD -16- argues that had FERC considered Zone 19, it would have seen that Tri-State’s placement in Zone 19 would have resulted in minimal cost shift. However, FERC did not err by failing to consider evidence of Zone 19. “FERC has interpreted its authority to review rates under [Section 205] as limited to an inquiry into whether the rates proposed by a utility are reasonable—and not to extend to determining whether a proposed rate schedule is more or less reasonable than alternative rate designs.” Cities of Bethany v. FERC, 727 F.2d 1131, 1136 (D.C. Cir. 1984). In Cities of Bethany, the D.C. Circuit explained that the standard in rate decisions is “not whether [one] method is more appropriate than [another] method, but rather whether the [proposed] method is reasonable and adequate.” Id. (internal quotation omitted). In addition, courts have made it clear that FERC “restricts itself to evaluating the confined proposal.” Advanced Energy, 860 F.3d at 662. Therefore, FERC “need only find the proposed rates to be just and reasonable.” City of Winnfield v. FERC, 744 F.2d 871, 875 (D.C. Cir. 1984) (Scalia, J.). The law does not require FERC to consider NPPD’s alternative suggestion of Tri-State’s placement in Zone 19 because its role was simply to decide whether SPP’s proposed placement of Tri-State was just and reasonable. Here, FERC “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.’” Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). Therefore, FERC did not act arbitrarily and capriciously in deciding that TriState’s placement into Zone 17 was just and reasonable.4 4 NPPD also argues that FERC erred because it ignored SPP’s new criterion established after FERC’s decision: the nature of transmission service used to serve the load of a new TO prior to its expected date of transfer to SPP. NPPD states that this would have shown that Tri-State belonged in Zone 19. However, as explained in this section, FERC did not have to consider NPPD’s alternative evidence of the benefits of placing Tri-State into Zone 19. See Advanced Energy, 860 F.3d at 662. -17-