Court Opinion

ID: 6317062
Source: CourtListenerOpinion
Date Created: 2022-02-24 16:00:43.934479+00
Date Added: 2024-06-11T09:00:33.403664
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

                Decided February 24, 2022

                       No. 22-1011

              IN RE: NTE CONNECTICUT, LLC,
                       PETITIONER

                 ISO NEW ENGLAND INC.,
                      INTERVENOR

On Petition for an Emergency Stay Pursuant to the All Writs
                           Act

   David W. DeBruin, Suedeen G. Kelly, and Zachary B.
Cohen were on the petition and the reply.

    Matthew R. Christiansen, General Counsel, Federal
Energy Regulatory Commission, Robert H. Solomon, Solicitor,
Beth G. Pacella, Deputy Solicitor, and Matthew W.S. Estes,
Attorney, were on the response to the petition.

    Before: WILKINS, RAO and JACKSON, Circuit Judges.

    Opinion for the Court filed by Circuit Judge RAO.

    Dissenting opinion filed by Circuit Judge WILKINS.

   RAO, Circuit Judge: Petitioner NTE Connecticut, LLC
(“NTE”) acquired valuable authorization to sell electricity
                                 2
from its new power plant. The Federal Energy Regulatory
Commission (“FERC”) revoked that authorization and, in so
doing, very likely fell short of its obligation under the
Administrative Procedure Act (“APA”) to explain the reason
for its decision. See Motor Vehicle Mfrs. Ass’n v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Absent emergency
relief from this court, FERC’s order would have irreparably
harmed NTE, preventing it from participating in a February 7,
2022, auction to sell future electricity capacity to New England
consumers. On February 4, 2022, we granted NTE’s petition
for an emergency stay of FERC’s order, with an opinion to
follow. This is that opinion.

                                 I.

                                 A.

     For the past seven years, NTE has been working to build a
new natural gas fueled power plant in Killingly, Connecticut.
In order to sell electricity on the New England grid, NTE had
to work with ISO New England Inc. (“ISO-NE”) to have the
project “qualified.” ISO-NE is the independent system operator
authorized by FERC to manage the regional grid. ISO-NE
oversees annual “forward capacity auctions” at which the
owners of generation facilities bid for the right to sell electricity
on the grid in the future. See NextEra Energy Res., LLC v.
FERC, 898 F.3d 14, 17 (D.C. Cir. 2018) (describing this
process). The right to provide “capacity” (i.e., the ability to
produce electricity), in the quantity and at the price fixed at
auction, is called a facility’s “capacity supply obligation”
(“CSO”). The CSO is tied to a one-year “capacity commitment
period” that begins three years after the auction. In concrete
terms, a generation facility awarded a CSO at the 2022 auction
gains the right to sell electricity for one year beginning June 1,
                                3
2025. A facility with a CSO is automatically “qualified” to
participate in future ISO-NE auctions.

     After locating a suitable parcel of land, designing the
facility, and preparing a timeline for the project’s financing and
construction, NTE applied to have the Killingly plant
“qualified.” ISO-NE approved the application, and in the 2019
auction NTE secured a CSO for the 2022 commitment period.
Under ISO-NE’s rules at the time, a newly qualified facility
was permitted to “lock in” the terms of its initial CSO for six
subsequent capacity commitment periods (i.e., for seven years
total). See ISO New England Inc., 173 FERC ¶ 61,198 at PP 2–
4 (2020). NTE exercised this option, giving it a guaranteed
income stream for the first seven years of the Killingly plant’s
operation, which in turn made it more attractive to potential
investors. NTE thereafter participated in the 2020 and 2021
auctions, securing contract rights to supply electricity for the
2023 and 2024 commitment periods.

      Initially, NTE had planned for the Killingly facility to
come online in early 2022. But soon after securing its first CSO
in 2019, NTE encountered a series of setbacks that prevented
it from meeting its financing and construction goals. First, just
after the 2019 auction, incumbent energy generators in New
England asked FERC to review ISO-NE’s qualification of the
Killingly plant, placing NTE’s CSO in jeopardy. FERC
eventually upheld NTE’s rights, but the results of the 2019
auction did not become final until September 2019. Second,
while the incumbent competitors’ challenge was pending
before FERC, several environmental groups sued in state court
to block the Connecticut Siting Council’s decision to approve
the Killingly plant. One of them, a nonprofit called Not
Another Power Plant, appealed the case to the Connecticut
Supreme Court, which did not issue a decision in NTE’s favor
until September 2021—some thirty-one months after the 2019
                                 4
auction. See Not Another Power Plant v. Conn. Siting Council,
265 A.3d 900 (Conn. 2021). In the interim, NTE had located a
potential investor for the Killingly plant. But because the
project’s viability depended on a favorable legal ruling, NTE
was unable to finalize financing while the case was under
review. Third, the arrival of the COVID-19 pandemic in early
2020 caused further complications. Disruptions to supply
chains and labor markets required NTE and its potential
investor to frequently recalculate the project’s shifting costs,
while pandemic related delays slowed NTE’s ability to secure
necessary construction permits. Because of these obstacles,
NTE was repeatedly forced to revise its timeline for the
Killingly plant’s construction.

     If the Killingly plant was not operational by May 31, 2024,
ISO-NE had the right to request that FERC terminate NTE’s
existing CSO, disqualifying it from participating in future
auctions. ISO-NE Tariff § III.13.3.4A.1 By September 2021,
ISO-NE was concerned that NTE was running out of time to
meet that deadline. As revised, NTE’s timetable required it to
finalize equity financing for the Killingly plant in mid-January
2022, to finalize debt financing in early March 2022, and to
begin commercial operation of the plant on May 31, 2024. NTE
also planned to issue full notices to proceed to its contractors
by January 1, 2022, before financing was finalized.

     ISO-NE hired a consultant to assess whether these plans
were feasible. After reviewing NTE’s timeline and conferring
with the parties, the consultant concluded that if NTE issued
full notices to proceed by January 1, 2022, “commercial
1
  “[I]f, as a result of milestone date revisions, the date by which a
resource will have achieved [operations] is more than two years after
the beginning of the Capacity Commitment Period for which the
resource first received a [CSO],” ISO-NE may request that FERC
terminate the resource’s CSO. ISO-NE Tariff § III.13.3.4A.
                                5
operation of [the Killingly plant] could occur on or about the
stated proposed commercial operation date of May 31, 2024.”
Issuing full notices on January 1, 2022, would give NTE
twenty-nine months to build the Killingly facility—“an
aggressive, but achievable schedule for a project of this scope.”
However, according to the consultant, full notices to proceed
typically cannot be issued before financing is secured. NTE’s
“assumption” that it would be able to issue full notices by
January 1, 2022, was therefore “unlikely.” Under a more
“realistic scenario,” the consultant concluded, NTE would be
able to issue full notices only after securing financing in mid-
January, resulting in a “likely commercial operation date”
beyond the deadline of May 31, 2024.

      On November 4, 2021, shortly after receiving the
consultant’s report, ISO-NE met with NTE to review its plans
for the Killingly plant. At the meeting, NTE told ISO-NE that
it remained confident it could complete construction on time.
It also produced a letter from its equity investor, indicating that
the investor would soon be ready to issue full notices to
proceed to major contractors and that those notices did not
depend on finalizing the project’s financing details with NTE.

                                B.

     Later that same day, ISO-NE asked FERC to terminate the
Killingly plant’s CSO. Such a termination would have voided
NTE’s rights to collect revenues for the 2022, 2023, and 2024
commitment periods. It would also have made NTE ineligible
to participate in the 2022 capacity auction, depriving NTE of
the “locked in” CSO for the 2025 commitment period.

    ISO-NE claimed that because of NTE’s timeline changes,
the Killingly facility would not achieve commercial operation
by the May 31, 2024, deadline. In support of this claim, ISO-
NE provided FERC with NTE’s most recent construction
                                6
timeline, ISO-NE’s consultant’s report, and the letter from
NTE’s equity investor. NTE’s timeline, ISO-NE observed,
“indicates that NTE will issue full notices to proceed on
January 1, 2022[,] … [which] assumes that those notices can
be issued without financing in place”—an assumption that
ISO-NE, relying on its consultant, rejected. Because “it is
unlikely that these notices to proceed will be executed without
financing in place,” ISO-NE argued, NTE “will be unable to
achieve commercial operation of Killingly” by the deadline.

     In response, NTE explained that the assumption on which
ISO-NE and its consultant relied—that NTE would not be able
to issue full notices to proceed until its equity financing was in
place in mid-January—was erroneous. At the time of ISO-NE’s
filing, NTE’s investor had expected to approve the transaction
in December 2021 and was willing to issue full notices to
contractors before financing was finalized, allowing NTE to
meet the January 1, 2022, target. ISO-NE had failed to
recognize, in other words, that NTE’s project had a unique
financing structure. NTE provided FERC with a declaration
from the Killingly plant’s lead developer, explaining that NTE
and its investor had agreed to issue full notices before financing
closed and that the parties had been on track to do so by January
1, 2022. NTE also submitted a declaration from the project’s
lead contractor, indicating that if full notices to proceed had
been issued on schedule, “it would have been feasible to
complete the project by May 31, 2024.” NTE further argued
that ISO-NE had not “met its burden … to show that Killingly
will not enter service by June 1, 2024,” but had “only
speculate[d] that Killingly will not meet the … deadline, which
is not the objective standard required by the Tariff.” ISO New
England Inc., 178 FERC ¶ 61,001 at P 19 (2022) (describing
NTE’s argument).
                                7
     On January 3, 2022, FERC issued an order terminating
Killingly’s CSO, which stripped NTE of its existing right to
provide electricity generation capacity for the 2022, 2023, and
2024 commitment periods, and which barred it from
participating in the 2022 auction—effectively nullifying
NTE’s vested right to generation revenues for the 2025
commitment period. See id. P 23. After recounting some of the
parties’ arguments, FERC concluded that, “[b]ased on a review
of the record, including the confidential information provided
by ISO-NE and NTE, … the relevant condition for termination
set forth in [ISO-NE’s] Tariff … has been met.” Id. P 25.
FERC’s only reason for this conclusion was that it was
“persuaded by the evidence provided by ISO-NE that, the
milestone date revisions indicate that Killingly will not have
achieved … commercial operation[] until after June 1, 2024.”
Id. P 26. In a footnote, FERC asserted that “[b]ecause much of
the pertinent information has been filed on a non-public basis,
this public order cannot go into detail regarding the specifics of
the triggering event or the basis for ISO-NE’s judgment that
Killingly will not be able to achieve … commercial operations
by June 1, 2024 as required by the tariff. Our review of these
non-public materials, however, satisfies us that this is the case.”
Id. P 26 n.39.

     NTE filed a combined emergency motion for a stay and
application for rehearing before FERC on January 10, 2022.
NTE argued that it would be irreparably injured without a stay
of FERC’s termination order: it would lose its right to future
revenues under Killingly’s existing CSO and would be
ineligible to participate in the upcoming 2022 auction.
Together, it alleged, these penalties would effectively kill the
project. FERC denied NTE’s motion for a stay on January 28,
2022. See ISO New England Inc., 178 FERC ¶ 61,063 (2022).
FERC reasoned that, because “economic loss does not
constitute irreparable harm,” the “[l]oss of potential capacity
                               8
market revenues … [was] insufficient” to warrant a stay. Id.
PP 14, 16. It further found that NTE’s assertion that its order
had “effectively killed” the Killingly project was too
speculative to support a finding of irreparable harm. Id. PP 5,
16. FERC did not respond to NTE’s request for rehearing and
had not done so at the time of our decision in this case.

     NTE filed a petition for emergency relief in this court,
asking us to stay FERC’s order until thirty days after FERC
addresses NTE’s application for rehearing. It requested that we
decide its petition in time for NTE to participate in the 2022
auction, to be held on February 7, 2022. For the reasons
outlined below, we granted that petition on February 4.

                               II.

     The All Writs Act gives this court the power to “issue all
writs necessary or appropriate in aid of [its] … jurisdiction[].”
28 U.S.C. § 1651(a). In an ordinary FERC case, we have
jurisdiction only after the agency issues a final order on
rehearing, see 16 U.S.C. § 825l(b), or after thirty days have
lapsed from a party’s application for rehearing, see id.
§ 825l(a). But this court has an “inherent” power under the All
Writs Act to stay agency action in order to preserve its
prospective jurisdiction. See Nken v. Holder, 556 U.S. 418, 427
(2009) (explaining that this authority is “firmly imbedded in
our judicial system, consonant with the historic procedures of
federal appellate courts, and a power as old as the judicial
system of the nation”) (cleaned up); see also Reynolds Metals
Co. v. FERC, 777 F.2d 760, 762 (D.C. Cir. 1985).

    At the time NTE petitioned this court for relief, FERC had
not acted on NTE’s application for rehearing, nor had the
requisite thirty days lapsed since NTE’s application for
rehearing. All parties agreed, therefore, that we could not stay
FERC’s order under the Federal Power Act’s ordinary
                               9
provisions for judicial review. At the time we granted NTE’s
request for a stay, however, our prospective jurisdiction was
certain: if FERC did not publish a rehearing order addressing
NTE’s objections, we would have jurisdiction after thirty days
to review a petition from NTE. We therefore had the authority
to consider NTE’s petition for emergency relief. See Am. Pub.
Gas Ass’n v. Fed’l Power Comm’n, 543 F.2d 356, 357–58
(D.C. Cir. 1976) (per curiam) (“[T]he authority of the appellate
court is not confined to the issuance of writs in aid of a
jurisdiction already acquired by appeal but extends to those
cases which are within its appellate jurisdiction although no
appeal has been perfected.”) (cleaned up).

     “[R]elief under the All Writs Act is an extraordinary
remedy that may be invoked only if the statutorily prescribed
remedy is clearly inadequate.” Reynolds, 777 F.2d at 762
(cleaned up). When an agency’s order is “not yet final, [such
that] no direct appeal from it yet [lies], and a stay pending
appeal [is] not available to prevent irreparable injury,” the
aggrieved party lacks an adequate statutory remedy. Id. NTE
and FERC agreed that, absent relief from this court, NTE
would have been unable to participate in the 2022 capacity
auction. NTE alleged that such a result would have led to an
irreparable injury: its Killingly plant would have been deprived
of a CSO for the 2025 commitment period that is worth
“millions of dollars” and that could not be recovered after the
auction. Further, because FERC had not acted on NTE’s
application for rehearing before the February 7 auction, NTE
was precluded from petitioning for direct judicial review of the
order or a judicial stay pending such review. NTE therefore
satisfied the “preliminary condition distinctive to All Writs
relief.” Id.

     Accordingly, we must next decide whether NTE has
satisfied the “well established requirements that we routinely
                                 10
apply to motions for stay pending appeal.” Id. We must
consider “(1) whether the stay applicant has made a strong
showing that [it] is likely to succeed on the merits; (2) whether
the applicant will be irreparably injured absent a stay; (3)
whether issuance of the stay will substantially injure the other
parties interested in the proceeding; and (4) where the public
interest lies.” Nken, 556 U.S. at 434 (cleaned up).2

                                 A.

     We begin with NTE’s likelihood of success on the merits.
NTE alleged that the termination order was arbitrary and
capricious because FERC did not explain why it adopted ISO-
NE’s argument for termination and ignored NTE’s arguments
to the contrary. FERC’s orders will be “set aside” if they are
“arbitrary [or] capricious.” 5 U.S.C. § 706(2)(A); see United
Airlines, Inc. v. FERC, 827 F.3d 122, 127 (D.C. Cir. 2016).
While FERC’s order need not be “a model of analytic precision
to survive a challenge,” Dickson v. Sec’y of Def., 68 F.3d 1396,
1404 (D.C. Cir. 1995), it must be “reasonable and reasonably

2
  This court has characterized various requests for relief under the
All Writs Act as petitions for mandamus, and our order granting
NTE’s petition reflected that practice. Strictly speaking, however,
NTE has not asked for a writ of mandamus—it does not ask us to
compel FERC to take some action—but for a stay of FERC’s order
to preserve the status quo. See Nken, 556 U.S. at 426–27
(distinguishing a stay pending further agency review from an
affirmative order to the Executive Branch to act). As explained
above, when a party requests a stay under the All Writs Act and “the
statutorily prescribed remedy is clearly inadequate,” we evaluate the
petition for relief like an ordinary application for a stay. Reynolds,
777 F.2d at 762 (cleaned up). To avoid confusion, with the
publication of this opinion we also revise the February 4 order to
remove the reference to mandamus and to clarify that we granted an
emergency petition for a stay pursuant to the All Writs Act.
                                11
explained,” Nw. Corp. v. FERC, 884 F.3d 1176, 1179 (D.C.
Cir. 2018). Because FERC’s termination order almost certainly
fell short of these requirements, NTE had a substantial
likelihood of success on the merits.

     First, FERC’s order did not provide a “reasoned
explanation” of the decision to terminate Killingly’s CSO.
FCC v. Fox Television Stations, Inc., 556 U.S. 502, 516 (2009).
Indeed, FERC hardly provided any reason at all. Its termination
order simply summarized some of the parties’ arguments in
broad strokes and then announced, without elaboration, that
FERC was “persuaded by the evidence provided by ISO-NE
that … Killingly will not [become operable] until after June 1,
2024.” ISO New England, 178 FERC ¶ 61,001 at P 26. The
order gives no explanation of why FERC found ISO-NE’s
evidence persuasive. FERC was entitled to reach that
conclusion (if the record supported it, of course, see 5 U.S.C.
§ 706(2)(E)). But it could not simply rubberstamp ISO-NE’s
analysis, especially since ISO-NE bore the burden below. As
we held in a similar case, an agency’s “unquestioning reliance”
on a third party’s “defense of its own actions is not enough” to
survive an arbitrary and capricious challenge. Susquehanna
Int’l Grp., LLP v. SEC, 866 F.3d 442, 447 (D.C. Cir. 2017)
(considering agency reliance on a self-regulatory
organization). An agency must either “critically review[]” the
third party’s analysis or “perform[] its own.” Id. Here, FERC
did neither.

      In place of such reasons, FERC cryptically asserted that it
could not explain its decision because “much of the pertinent
information [was] filed on a non-public basis.” ISO New
England, 178 FERC ¶ 61,001 at P 26 n.39. In the first instance,
it is unclear why, if confidentiality concerns prevented FERC
from publishing a more complete analysis, it could not simply
redact its order before public release, as federal courts routinely
                                12
do, and as FERC has done in the past. See, e.g., White Cliffs
Pipeline, LLC, 168 FERC ¶ 63,033 (2019), aff’d, 173 FERC
¶ 61,155 (2020). More fundamentally, we reject the premise
that if a matter implicates confidential information an agency
is somehow absolved of its responsibility to explain its
decision. It is “inherent in the doctrine of judicial review” that
an agency must “articulate with clarity and precision its
findings and the reasons for its decisions.” WAIT Radio v. FCC,
418 F.2d 1153, 1156 (D.C. Cir. 1969). We see no reason here
to depart from the bedrock principle that, “in all cases, the
Commission must explain its reasoning.” Emera Me. v. FERC,
854 F.3d 9, 23 (D.C. Cir. 2017) (cleaned up). The APA does
not contain a confidentiality loophole.

     Nor did FERC acknowledge, let alone reasonably reject,
NTE’s central argument against termination—namely, that its
plan to issue full notices to proceed by January 1, 2022, was
viable, and that ISO-NE’s assertion to the contrary was
unsupported by the record. ISO-NE’s argument for termination
was expressly predicated on the very assumption that NTE
contested. Moreover, NTE submitted additional evidence to
FERC supporting the viability of its construction timeline and
explaining its project’s unique financing structure, which
allowed full notices to be issued before the financing was
finalized. Again, FERC was entitled to conclude that NTE’s
evidence was unpersuasive or that its timeline was unfeasible
for other reasons. But it could not simply ignore NTE’s central
objection to ISO-NE’s analysis.3 “An agency’s failure to

3
  The dissent faults NTE for submitting new evidence to FERC that
was not previously considered by ISO-NE. But there is no dispute
that the evidence was properly before FERC. The fact that evidence
on a key point of dispute was previously unaddressed by ISO-NE
only accentuates FERC’s obligation to provide independent analysis.
The dissent denigrates NTE’s submissions as “eleventh hour, self-
                                  13
respond meaningfully to objections raised by a party renders its
decision arbitrary and capricious. We have stressed that unless
the agency answers objections that on their face seem
legitimate, its decision can hardly be classified as
reasoned.” PPL Wallingford Energy LLC v. FERC, 419 F.3d
1194, 1198 (D.C. Cir. 2005) (cleaned up). FERC’s failure to
address NTE’s facially legitimate arguments was especially
concerning given that its decision upended the status quo ante,
threatening to deprive NTE of “millions of dollars” of future
revenues to which it had been entitled.

    Second, FERC failed to articulate a discernable legal
standard under ISO-NE’s Tariff to govern the termination of
NTE’s valuable right to a CSO for the 2025 commitment
period. As the party moving to terminate the CSO, ISO-NE
bore the burden of showing why the Tariff’s conditions for
termination were met. See 5 U.S.C. § 556(d) (“Except as
otherwise provided by statute, the proponent of a rule or order
has the burden of proof.”); cf. Ala. Power Co. v. FERC, 993
F.2d 1557, 1571 (D.C. Cir. 1993) (“[T]he party filing a rate

serving, uncorroborated hearsay.” Even if the dissent’s criticisms
were fair, FERC did not make them but merely ignored NTE’s
submissions. And although we are permitted and indeed required to
look at the administrative record when evaluating APA challenges,
that does not excuse FERC from its duty to explain the reasons for
its actions. Nor does it justify this court making what are effectively
de novo evidentiary determinations about the credibility or weight of
the evidence. See, e.g., Phoenix Herpetological Soc’y, Inc. v. U.S.
Fish & Wildlife Serv., 998 F.3d 999, 1006 n.14 (D.C. Cir. 2021)
(“We hesitate … to endorse the district court’s rejection of the …
affidavit as ‘uncorroborated hearsay,’ particularly since the agency
did not offer this rationale during the adjudication.”).
      We further note that FERC has not been ambushed by
arguments it did not have a chance to consider. The agency had
weeks to respond to NTE’s application for rehearing, which raised
the same arguments considered by the court in granting this stay.
                                14
adjustment with the Commission under [Section] 205 bears the
burden of proving the adjustment is lawful.”). In addition, ISO-
NE bore the burden of showing that termination of NTE’s CSO
was “just and reasonable.” 16 U.S.C. § 824d(a), (e); see, e.g.,
ISO New England Inc., 165 FERC ¶ 61,137 at P 31 (2018).

     The Tariff, however, does not explicitly state the standard
that ISO-NE must satisfy to justify termination. The Tariff
permits ISO-NE to request termination “if, as a result of
milestone date revisions, the date by which a resource will have
achieved [commercial operation] is more than two years after
the beginning of [its first] Capacity Commitment Period.” ISO-
NE Tariff § III.13.3.4A (emphasis added). Under these terms,
must ISO-NE show that, “as a result of milestone date
revisions,” it will be impossible for NTE to meet its deadline?
Do the new milestone dates have to make timely completion
unlikely? Is there some other standard? FERC’s failure to
identify the burden that ISO-NE was required to carry further
supports the conclusion that FERC did not adequately explain
why it was satisfied in this case.

      ISO-NE’s consultant found that NTE’s construction
timeline was “aggressive, but achievable.” In other words, if
NTE had issued full notices to proceed by January 1, 2022,
commercial operation of the plant by May 1, 2024, was at least
possible. FERC’s laconic order gives no indication of how
ISO-NE could meet its burden under the Tariff given the
consultant’s finding. Perhaps FERC simply did not believe
NTE would meet its own deadlines, but even if FERC relied on
that credibility finding, it needed to explain its conclusion. The
Tariff does not expressly give ISO-NE the right to terminate a
CSO simply because it believes the facility’s developer will not
meet its otherwise acceptable milestone dates. Rather, the CSO
is a valuable allocation of rights to provide electricity, and ISO-
NE must request that FERC terminate it. FERC, in turn, must
                               15
comply with the APA’s rationality requirements and find the
termination of such rights “just and reasonable.”

     Were this order before us on direct review, we would very
likely find it unreasoned, and therefore unlawful. Indeed,
FERC concedes that it provided an “admittedly limited
explanation in the Termination Order.” Without further
explanation, we had no reason to believe that FERC reasonably
exercised its discretion. We therefore found that NTE is almost
certain to succeed in its challenge to FERC’s termination order.

                               B.

     We next consider whether NTE faced irreparable harm in
the absence of a stay. Nken, 556 U.S. at 434. As a result of
FERC’s termination order, NTE would have been ineligible to
participate in the 2022 capacity auction. But before FERC
issued its order, NTE was guaranteed to secure a CSO at the
2022 auction, entitling it to provide the same amount of
capacity, at the same price, that it secured in the 2019 auction.
This future revenue stream is worth “millions of dollars,” and
FERC does not dispute that it is significant.

     Ordinarily, “economic loss does not, in and of itself,
constitute irreparable harm.” Wis. Gas Co. v. FERC, 758 F.2d
669, 674 (D.C. Cir. 1985) (per curiam). That is because in most
circumstances financial harms can be remedied through
subsequent legal action. See id. Nonetheless, we have
recognized that “financial injury [can be] irreparable where no
‘adequate compensatory or other corrective relief will be
available at a later date, in the ordinary course of
litigation.’” Mexichem Specialty Resins, Inc. v. EPA, 787 F.3d
544, 555 (D.C. Cir. 2015) (quoting Wis. Gas Co., 758 F.2d at
674).
                              16
     This is such a case. If NTE had been barred from the 2022
auction, the capacity rights to which it was formerly entitled
would have been allocated to other generators on the New
England grid. Given the reliance interests involved, FERC does
not generally direct entities like ISO-NE to vacate the results
of earlier auctions and rerun them to include new entrants. See
PJM Interconnection, LLC, 161 FERC ¶ 61,252 at P 55 (2017)
(“The Commission generally does not order a remedy that
requires rerunning a market [auction] because market
participants … expect[] that the rules in place and the outcomes
will not change after the results are set.”). If NTE had been
excluded from the auction and FERC’s order were later found
to be unlawful, the capacity that NTE would have received at
the 2022 auction could not later be clawed back. Without the
capacity allocation, it is unlikely that NTE would have had a
claim to lost revenue streams. FERC has made no
representation to the contrary, and we are aware of no other
mechanism through which NTE could have recovered these
losses.

     The circumstances and timing here are unusual because, in
order to realize its vested contractual rights, NTE had to take
part in a regulatory auction with other participants. Absent
emergency relief, FERC’s termination order would have
irreparably and permanently stripped NTE of very significant
future revenues to which it was entitled before FERC issued its
(likely unlawful) order.

                              C.

     Next we consider “whether issuance of the stay will
substantially injure the other parties interested in the
proceeding” and balance the equities. Nken, 556 U.S. at 434
(cleaned up). As explained above, our emergency stay
permitted NTE to participate in the 2022 ISO-NE auction and
                               17
to acquire a CSO for the Killingly plant for the 2025
commitment period. The stay also paused FERC’s termination
of NTE’s already acquired CSO for the commitment periods
running from June 1, 2022, to May 31, 2025.

     FERC pointed to possible third-party harms that may
befall incumbent electricity generators. Specifically, it asserts
that NTE’s participation in the 2022 auction would provide
additional energy supply in the region, driving down electricity
costs on the New England grid in the 2025 commitment period.
Because of our stay, incumbent generators would accordingly
be paid less for the electricity they generate and would be able
to sell less overall capacity. Such third-party harm, however,
will be short-lived if FERC’s order is sustained in the future,
because the capacity NTE secured at the 2022 auction can be
reallocated     among       existing    facilities  through     a
“reconfiguration auction.” FERC does not contest the
feasibility of such a limited reauction.

     Finally, we must decide “where the public interest lies.”
Id. NTE’s participation in the 2022 auction was expected to
lower energy costs for New England consumers by generating
more supply and competition in the electricity market. One
goal of a forward capacity auction is to “incentivize and
account for new entry by more efficient generators, while
ensuring a price both adequate to support reliability and fair to
consumers.” NextEra, 898 F.3d at 20 (cleaned up). Our
temporary stay pending agency rehearing simply ensured that
FERC did not impose unrecoverable losses of millions of
dollars and potentially jeopardize a new facility without
fulfilling the basic requirements of reasoned explanation.

     FERC protested that to permit NTE to participate in the
2022 auction, even though the Killingly facility will not be able
to provide electricity in the relevant commitment period, would
                               18
distort market competition and “undermine the basic
functioning of [ISO-NE’s] capacity market, including its
ability to send accurate price signals to guide entry and exit.”
As the facts here demonstrate, however, entry and exit into the
electricity market hardly moves at a rapid pace. And entities
like ISO-NE regularly reallocate capacity if a facility is unable
to fulfill its commitments, allowing for a correction of any
market distortion. More to the point, nothing in FERC’s
reasoning suggests the risk that incumbents may have to
reallocate electricity capacity amongst themselves outweighs
the harm of delaying NTE’s years-long electricity
infrastructure project that could benefit consumers in the region
through more efficient (i.e., less expensive) electricity.

                             ***

    For the foregoing reasons, we granted NTE’s petition to
stay FERC’s termination order until thirty days after FERC
resolves the pending application for agency rehearing.
     WILKINS, Circuit Judge, dissenting: Because I believe that
the petition for relief should have been denied, I dissent.

     To demonstrate entitlement to relief, the first and foremost
consideration is “‘whether the stay applicant has made a strong
showing that he is likely to succeed on the merits[.]’” Nken v.
Holder, 556 U.S. 418, 434 (2009) (emphasis added) (quoting
Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). In addition,
we must consider whether NTE has shown that it will suffer
irreparable harm absent a stay, whether a stay will substantially
injure other parties and whether a stay is in the public interest.
Nken, 556 U.S. at 434. The public interest and balance of
equities factors merge when, as here, the government is the
opposing party. Id. at 435. In my view, NTE failed to meet its
burden of making a “strong showing” that it is likely to succeed
on the merits, which in turn undermines its showing that the
public interest and balance of equities support a stay. See
Hilton, 481 U.S. at 776; cf. Shawnee Tribe v. Mnuchin, 984
F.3d 94, 102 (D.C. Cir. 2021) (“A party’s likelihood of success
on the merits ‘is a strong indicator that a preliminary injunction
would serve the public interest’ because ‘[t]here is generally no
public interest in the perpetuation of unlawful agency action.’”)
(quoting League of Women Voters of United States v. Newby,
838 F.3d 1, 12 (D.C. Cir. 2016)).

     Prior to the agency action under review, NTE had delayed
the date for Killingly’s financing milestone fourteen times,
resulting in multiple delays of the expected commercial
operating date of the power plant. In January of 2021, FERC
warned NTE that ISO-NE had a duty under the Tariff “to
monitor Killingly’s critical path schedule,” and that further
delays in financing milestones could result in ISO-NE
exercising its right to seek termination of NTE’s CSO. ISO
New England, Inc., 174 FERC ¶ 61,046 P 40 & n.63 (2021).
As FERC explained, the Tariff permits ISO-NE to seek
termination of NTE’s CSO if, as a result of milestone date
revisions, “the date by which [NTE] will achieve all critical
                               2
path schedule milestones is more than two years after the
beginning of the first Capacity Commitment Period for which
it acquired a CSO.” Id. at n.63.

      Because NTE’s subsequent reports indicated further
financing delays, ISO-NE hired an expert consultant “to assist
in reviewing Killingly’s critical path schedule.” ISO-NE Term.
Filing 6. The consultant’s report was not favorable for NTE.
As ISO-NE explained, “[the consultant’s] review supports that
the date by which Killingly will achieve all its critical path
schedule milestones is more than two years after the beginning
of the Capacity Commitment Period for which Killingly first
received a CSO.” Id. ISO-NE therefore asked FERC to accept
its request to terminate NTE’s CSO.

    FERC accepted ISO-NE’s termination filing. FERC
explained that it agreed with ISO-NE’s assessment of the
evidence:

       We are persuaded by the evidence provided by
       ISO-NE that, the milestone date revisions
       indicate that Killingly will not have achieved all
       of its critical path schedule milestones,
       including commercial operation, until after June
       1, 2024, i.e., more than two years after June 1,
       2022—the beginning of the 2022-2023
       Capacity Commitment Period.

ISO New England, Inc., 178 FERC ¶ 61,001 P 26 (2022). As
FERC explained, the consultant’s report, which is in the record,
supported ISO-NE’s conclusion. Id. at PP 25–26.

     FERC’s explanation was sufficient. “Our only task is to
determine whether the Commission has considered the relevant
factors and articulated a rational connection between the facts
                                3
found and the choice made.” Baltimore Gas & Elec. Co. v.
Nat. Res. Def. Council, Inc., 462 U.S. 87, 105 (1983). This is
a “‘narrow’ standard of review[.]” FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 513 (2009) (quoting Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.
29, 43 (1983)). The instances where we have set aside agency
action for insufficient explanation are where the explanation
was “neither logical nor rational,” “[in]coherent,”
“incomprehensible,” or where the agency completely failed to
explain inconsistencies with the governing statute, its prior
precedent, or the evidence. NBCUniversal Media, LLC v.
NLRB, 815 F.3d 821, 823 (D.C. Cir. 2016); see CSI Aviation
Servs., Inc. v. U.S. Dep’t of Transp., 637 F.3d 408, 416 (D.C.
Cir. 2011).

     None of those circumstances are present here. NTE does
not seriously contend that the expert consultant’s report did not
constitute substantial evidence to support FERC’s Order, nor
could it. The best argument that NTE can muster is that FERC
did not set forth in detail why it accepted the consultant’s report
over NTE’s interpretation of the evidence. But that argument
hardly presents a “strong showing” of success. See Hilton, 481
U.S. at 776. First, the FERC Order explained the competing
arguments made by NTE and ISO-NE in some detail, 178
FERC ¶ 61,001 at PP 12–19, so there is no question here that
FERC considered NTE's arguments and all the record
evidence. Furthermore, FERC’s Order need not be “a model
of analytic precision to survive a challenge,” Dickson v. Sec’y
of Def., 68 F.3d 1396, 1404 (D.C. Cir. 1995), and we may
“uphold a decision of less than ideal clarity if the agency’s path
may reasonably be discerned.” State Farm, 463 U.S. at 43
(citations and internal quotation marks omitted).

       FERC’s reasoning is discernible because FERC explained
that     it agreed with ISO-NE’s analysis of the
                                4
evidence. Furthermore, we can look at the reasoning appearing
in the text of the ISO-NE Order to help us discern FERC’s
path. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401
U.S. 402, 420 (1971) (directing the lower court to examine the
record that was before the agency at the time of decision to
determine whether it “disclose[d] the factors that were
considered”); Tourus Recs., Inc. v. Drug Enf’t Admin., 259
F.3d 731, 738 (D.C. Cir. 2001) (considering contemporaneous
agenda memoranda in the record because they illuminate the
“agency’s decisionmaking rationale”). ISO-NE rejected
NTE’s reliance on a November 4, 2021 letter from its equity
investor, because the letter said that full notices to proceed with
construction would not issue until financing was approved by
the investor’s board of directors, but the letter did not specify a
date by which such board approval was expected to occur. ISO-
NE Term. Filing 7 & n.19. NTE later proffered a declaration
stating that “[i]n conversations with NTE, [the equity investor]
specified that it expected to obtain Board approval and to issue
Final Notices [to proceed] in December[.]” NTE Pet. Attach.
B ¶ 15. But NTE did not provide this declaration to ISO-NE
before ISO-NE decided to terminate Killingly’s capacity
supply obligation, nor did NTE provide FERC any
corroborating evidence from the equity investor.

     As the majority concedes, NTE proffered a “unique”
financing structure where NTE claimed it could fully proceed
with construction prior to having funds in hand. ISO-NE’s
expert consultant explained, and FERC credited, that “on most
projects,” a full notice to proceed does not issue until “after
financing has closed with the lending institutions that are
providing the funds, often on the same day and part of the
closing proceedings.” NTE Pet. Attach. F at 3. It stands to
reason that on a project costing hundreds of millions of dollars,
contractors would require proof of financing and the actual
payment of deposits prior to starting work and ordering
                               5
equipment, rather than promises that financing and funds will
be forthcoming soon. FERC acted well within its discretion to
find it was “persuaded by the evidence provided by ISO-NE,”
178 FERC ¶ 61,001 at P 26, and to reject NTE’s eleventh-hour,
self-serving uncorroborated hearsay that construction would
proceed in a manner contrary to ordinary industry practice. See
Phoenix Herpetological Soc’y, Inc. v. United States Fish &
Wildlife Serv., 998 F.3d 999, 1006 (D.C. Cir. 2021).

   When rejecting a similar challenge to FERC’s predecessor
many decades ago, the Supreme Court observed:

       The findings of the Commission in this regard
       leave much to be desired since they are quite
       summary and incorporate by reference the
       Commission’s staff’s exhibits on allocation of
       cost. But the path which it followed can be
       discerned. And we do not believe its findings
       are so vague and obscure as to make the judicial
       review contemplated by the Act a perfunctory
       process.

Colorado Interstate Gas Co. v. Fed. Power Comm’n, 324 U.S.
581, 595 (1945). The Court’s reasoning has been followed in
State Farm, FCC v. Fox Television Stations, and countless
times since. We are duty bound to follow it here. I respectfully
dissent.