Court Opinion

ID: 6323478
Source: CourtListenerOpinion
Date Created: 2022-03-15 18:01:58.528116+00
Date Added: 2024-06-11T09:21:37.679629
License: Public Domain

United States Court of Appeals
                           FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 20-1315                                                  September Term, 2021
                                                             FILED ON: MARCH 15, 2022
LOUISIANA PUBLIC SERVICE COMMISSION,
                   PETITIONER

       v.

FEDERAL ENERGY REGULATORY COMMISSION,
                  RESPONDENT

ARKANSAS PUBLIC SERVICE COMMISSION; ENTERGY ARKANSAS, LLC; ENTERGY CORPORATION;
ENTERGY LOUISIANA, LLC; ENTERGY MISSISSIPPI, LLC; ENTERGY NEW ORLEANS, LLC;
ENTERGY SERVICES, LLC; ENTERGY TEXAS, INC.,
                   INTERVENORS

Consolidated with 21-1029

                                On Petition for Review of Orders
                         of the Federal Energy Regulatory Commission

       Before: HENDERSON and WALKER, Circuit Judges, and RANDOLPH, Senior Circuit Judge.

                                       JUDGMENT

       This petition for review of orders of the Federal Energy Regulatory Commission was
presented to the court and briefed and argued by counsel. The court has accorded the issues full
consideration and has determined that they do not warrant a published opinion. See D.C. CIR. R.
36(d). For the reasons set out below, it is

       ORDERED and ADJUDGED that the petition for review be DENIED.

         The Louisiana Public Service Commission petitions for judicial review of orders of the
Federal Energy Regulatory Commission regarding cost allocation among Entergy Corporation’s
operating companies. At the time relevant to this proceeding, the Entergy operating companies were
six utilities in four states — Entergy Arkansas, Inc., Entergy Gulf States Louisiana, LLC, Entergy
Louisiana, LLC, Entergy Mississippi, Inc., Entergy Texas, Inc., and Entergy New Orleans, Inc.
Opinion No. 560, 162 FERC ¶ 61,234, at P. 1 n.2 (2018).1 The companies operated according to the
Entergy System Agreement, “which required the six utilities to plan and operate their facilities as
a single electric system.” La. Pub. Serv. Comm’n v. FERC, 20 F.4th 1, 4 (D.C. Cir. 2021). “FERC
mandated that production costs among the utilities be roughly equal.” Id.

        After FERC determined that the System Agreement “no longer produced rough cost
production equalization,” FERC “ordered modifications designed to maintain roughly equal
production costs between the Operating Companies within +/-11 percent of the system-wide
average.” Opinion No. 560, at P. 2. To achieve compliance with FERC’s mandate, Entergy adopted
the so-called “bandwidth” remedy. Id. The bandwidth remedy “provides that when an Operating
Company’s production costs deviate more than 11 percent above or below the Entergy System’s
average on an annual basis, the Operating Companies with the lower costs will make payments . . .
to the ones with higher costs such that their overall costs return to rough equalization.” La. Pub.
Serv. Comm’n v. FERC, 866 F.3d 426, 427 (D.C. Cir. 2017).

       The focus of Louisiana’s petition is a single input to the formula used to calculate the
production costs of one Entergy operating company, the former Entergy Louisiana, LLC. When the
parent Entergy calculated Entergy Louisiana’s production costs, it did not include certain
accumulated deferred income tax2 amounts related to a sale/leaseback transaction involving the
Waterford 3 nuclear power plant owned by Entergy Louisiana. FERC initially concluded that the
exclusion of such amounts from the formula was not erroneous. Opinion No. 505, 130 FERC
¶ 61,023, at P. 233 (2010).

        In 2020, FERC changed its view with respect to the “tax gain” portion of the amounts but
not the “additional interest” portion. Order Granting, in Part, and Denying in Part, Rehearing, 171
FERC ¶ 61,044, at PP. 43–46 (2020) (“First Rehearing Order”). FERC ordered Entergy
Corporation to correct its bandwidth calculations, but only for the fourth through seventh bandwidth
proceedings — which correspond to test years 2009, 2010, and 2011. Id. at P. 46; Order Addressing
Arguments Raised on Rehearing, & Setting Aside Prior Order, in Part, & Directing Further
Compliance, 173 FERC ¶ 61,152, at P. 44 (2020) (“Second Rehearing Order”).

       FERC denied Louisiana’s request to require correction in the first, second, and third
bandwidth proceedings (test years 2006, 2007, and 2008). Second Rehearing Order, at P. 46.
Louisiana claims this was error.

        FERC’s 2015 order had established the temporal scope of the bandwidth remedy Louisiana
sought in its complaint and request for rehearing. Order Denying Rehearing, 153 FERC ¶ 61,304,
at P. 24 (2015); J.A. 146 (complaint); J.A. 380 (request for rehearing). Corrections were limited to
the fourth and later bandwidth proceedings. Louisiana did not seek rehearing of that determination.

        1
         Since then, Entergy Gulf States Louisiana, LLC and the former Entergy Louisiana, LLC have been
combined into a single entity called Entergy Louisiana, LLC. See Opinion No. 560, at P. 1 n.2; see also L.A.
524 n.3.
        2
            The parties refer to accumulated deferred income tax as “ADIT.”
Second Rehearing Order, at P. 46. In arguing against FERC’s decision, Louisiana asserts — in a
post-argument motion in this court — that had the relevant costs been included in the calculation,
Entergy Louisiana would have received additional bandwidth remedy payments from Entergy
Arkansas, LLC and those payments would have been passed on to Louisiana retail ratepayers.

        Under Federal Power Act § 313, “[a]ny person, electric utility, State, municipality, or State
commission aggrieved by” a FERC order has thirty days to apply for rehearing. 16 U.S.C. § 825l(a).
When FERC denies a rehearing application, the aggrieved party has sixty days to petition for judicial
review. Id. § 825l(b). An aggrieved party’s timely rehearing request is a prerequisite to judicial
review.

         FERC treated Louisiana’s failure to seek rehearing of the 2015 order as a bar to
reconsideration of the recalculation period. It was entitled to do so. See City of Nephi v. FERC, 147
F.3d 929, 934 (D.C. Cir. 1998); ANR Pipeline Co. v. FERC, 988 F.2d 1229, 1231–35 (D.C. Cir.
1993).3 The federal courts have a comparable doctrine known as “law of the case”: “the same issue
presented a second time in the same case in the same court should lead to the same result.”
LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996) (en banc). Louisiana complains that the
2015 order was not final, and therefore no rehearing application was required. But FERC,
interpreting its rules of procedure, 18 C.F.R. § 385.713(a)(2), was well within its discretion to treat
it as such. Second Rehearing Order, at P. 46 & n.130; see Kisor v. Wilkie, 139 S. Ct. 2400, 2415–18
(2019). FERC also stressed that it was Louisiana that proposed making the bandwidth prospective
from June 1, 2010, the effective date of the fourth bandwidth proceeding. Second Rehearing Order,
at P. 46 & nn.128–29. Here again there is a comparable discretionary doctrine in the federal courts
— the doctrine of “judicial estoppel.”4

        For these reasons we deny Louisiana’s petition.

                                                  *    *    *

        3
         Although ANR Pipeline Co. is a proceeding under the Natural Gas Act, 988 F.2d at 1231–32, “[w]e
follow here the familiar practice of applying interchangeably judicial interpretations of provisions from the
Natural Gas Act to their substantially identical counterparts in the Federal Power Act.” NSTAR Elec. & Gas
Corp. v. FERC, 481 F.3d 794, 800 (D.C. Cir. 2007) (internal quotation marks omitted).
        4
           See, e.g., New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (internal quotation marks and
citations omitted):

        [S]everal factors typically inform the decision whether to apply the doctrine in a particular
        case: First, a party’s later position must be clearly inconsistent with its earlier position.
        Second, courts regularly inquire whether the party has succeeded in persuading a court to
        accept that party’s earlier position, so that judicial acceptance of an inconsistent position in
        a later proceeding would create the perception that either the first or the second court was
        misled. Absent success in a prior proceeding, a party’s later inconsistent position introduces
        no risk of inconsistent court determinations, and thus poses little threat to judicial integrity.
       This disposition is unpublished. See D.C. CIR. R. 36(d). We direct the Clerk to withhold the
mandate until seven days after any timely petition for rehearing or rehearing en banc is resolved.
See FED. R. APP. P. 41(b); D.C. CIR. R. 41(a)(1).

                                           Per Curiam

                                                     FOR THE COURT:
                                                     Mark J. Langer, Clerk

                                             BY:     /s/
                                                     Daniel J. Reidy
                                                     Deputy Clerk