Opinion ID: 1373126
Heading Depth: 2
Heading Rank: 2

Heading: CIPCO, IPL, and the Operating and Transmission Agreement

Text: CIPCO is a generation and transmission electrical power cooperative based in Cedar Rapids, Iowa. CIPCO owns power lines, substations, and related facilities that it uses to provide power and transmission service to its customers. Its transmission system is interconnected with the transmission system of Interstate Power & Light (IPL), a subsidiary of Alliant Energy. [1] This CIPCO-Alliant interconnected network is referred to as the Integrated Transmission System (ITS), and the central factual allegation in these proceedings is that CIPCO's elements of the ITS have been used without authorization and without compensation by MISO, RPGI, and its members. In 1991, CIPCO and Iowa Electric Light and Power (Alliant's predecessor in interest) entered into an Operation and Transmission Agreement (O & T Agreement). The O & T Agreement governs CIPCO's and Alliant's operation, maintenance, and use of the ITS. Under § 5.01 of the O & T Agreement, CIPCO and Alliant each maintain ownership of their own separate and discrete elements of the ITS, but pursuant to § 5.06 Alliant provide[s] all management, supervision, operating supplies, services and labor for the operation of CIPCO's transmission facilities included in the [ITS]. (J.A. at 66.) Under § 5.14 of the Agreement, both CIPCO and Alliant may use the ITS, including the other party's facilities, to wheel power for their own customers. No wheeling charge is assessed for one party's use of the other party's facilities for this purpose. In contrast, § 5.15 of the Agreement governs use of the ITS for [the] Benefit[ ] of [Third-Party] Systems or [Third-Party] Electric Suppliers: In the event that either CIPCO or [Alliant] enter into an agreement with a non-party to this Agreement to wheel power for such non-party, or to serve customers of said non-party, thereby utilizing the Integrated Transmission System, the agreement with respect to such transaction shall be approved both by CIPCO and [Alliant]. Any monies paid to CIPCO or to [Alliant] for such services shall be shared by both in the same proportion as the basis for investment in transmission facilities described in section 5.17 hereof. (J.A. at 71.) Under § 5.17, Alliant is entitled to 69 percent of those revenues, leaving 31 percent for CIPCO. The appellees imply throughout their briefs that the O & T Agreement establishes a rate for third-party use of the ITS pursuant to § 5.15 of the Agreement. But no party directs us to any portion of the O & T Agreement identifying such a rate, and our reading of the O & T Agreement discloses no such rate. Moreover, during oral argument, appellee Resale Power Group of Iowa (RPGI) unequivocally stated that the O & T Agreement contains no such rate. Because Alliant is a public utility under the Federal Power Act and subject to the jurisdiction of the FERC, 16 U.S.C. § 824(e), it is required to file a rate schedule with the FERC in an OATT (for those readers who are at this point suffering from acronym overload, OATT stands for open access transmission tariff, ante p. 4, and should not be confused with the O & T Agreement discussed in this subsection B. and elsewhere in this opinion). See 16 U.S.C. § 824d(c). In 1994, well before the FERC issued Order No. 888, Alliant's predecessor in interest filed its rate schedule with the FERC and attached the O & T Agreement to its filing as an exhibit. Even though CIPCO is not a public utility under the FPA and is not subject to the FERC's jurisdiction, the O & T Agreement between the two parties was included because, in the words of Alliant's predecessor, even though [s]ome of the[ ] [Agreement's] arrangements arguably do not involve jurisdictional services ... [they] may have some impact on the ultimate pricing of jurisdictional services. (J.A. at 106.) The FERC accepted the O & T Agreement for filing. (J.A. at 350, FERC Letter Order, Docket No. ER94-247-000 (Aug. 11, 1994).)