Court Opinion

ID: 2756448
Source: CourtListenerOpinion
Date Created: 2014-12-02 16:01:08.125343+00
Date Added: 2024-06-11T12:08:07.148943
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 7, 2014            Decided December 2, 2014

                         No. 13-1184

   MIDLAND POWER COOPERATIVE AND NATIONAL RURAL
         ELECTRIC COOPERATIVE ASSOCIATION,
                    PETITIONERS

                             v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT

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

     William D. DeGrandis argued the cause for petitioners.
With him on the briefs were Charles A. Patrizia, Stephen B.
Kinnaird, Candice Castaneda, Jay A. Morrison, and Pamela
Silberstein.

     Holly Rachel Smith argued the cause for petitioner-
intervenors Iowa Utilities Board and National Association of
Regulatory Utility Commissioners. With her on the brief
were James Bradford Ramsay and David J. Lynch.

    Lisa B. Luftig, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on
the brief were David L. Morenoff, Acting General Counsel,
and Robert H. Solomon, Solicitor.
                              2

     Sean A. Minahan was on the brief for respondent-
intervenors Gregory Swecker and Beverly Swecker. Robert P.
Trout entered an appearance.

    Before: GARLAND, Chief Judge, GRIFFITH, Circuit Judge,
and WILLIAMS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.

    WILLIAMS, Senior Circuit Judge: The Federal Energy
Regulatory Commission issued an order directing Midland
Power Cooperative, an Iowa electric utility, to “reconnect” to
a wind generator within its territory. Swecker v. Midland
Power Cooperative, 137 FERC ¶ 61,200 (2011) (“Order”). It
denied Midland’s petition for rehearing. Swecker v. Midland
Power Cooperative, 142 FERC ¶ 61,207 (2013) (“Order on
Rehearing”). Midland and joint petitioner National Rural
Electric Cooperative Association (“NRECA”) seek review.
The first question, and as it proves the last, is whether we
have jurisdiction. The answer is that we do not.

                           * * *

    The orders under review arise out of a prolonged dispute
between Gregory and Beverly Swecker and Midland. The
Sweckers own and operate on their Iowa farm a 65kW wind
generator that is classified as a qualifying facility (“QF”)
under § 210 of the Public Utility Regulatory Policies Act of
1978 (“PURPA”), Pub. L. 95-617, 92 Stat. 3144 (codified at
16 U.S.C. § 824a-3). QFs comprise cogenerators (which
produce both electricity and steam or some other form of
useful energy) and “small power production facilit[ies]”
(which have a production capacity of no more than 80
megawatts and rely on various forms of renewable resources).
16 U.S.C. §§ 796(18)(A), 796(17)(A); see also FERC v.
                                3

Mississippi, 456 U.S. 742, 750 & n.11 (1982). Congress
believed that the development of such facilities had been
impeded by the reluctance of traditional electric utilities to
purchase from and sell to them, and by the financial burden
imposed on such facilities by state and federal regulation.
Through § 210 it authorized FERC to promulgate rules
requiring utilities to purchase from and sell to such QFs. Id.
at 750-51. The rates to be prescribed by FERC for utilities’
purchases were not to exceed “the incremental cost to the
electric utility of alternative electric energy,” § 210(b), or so-
called “avoided cost,” 18 C.F.R. § 292.304(b)(2).

     Section 210 and the ensuing regulatory scheme require
Midland to be ready to purchase power from the Sweckers’
QF and also to supply them with retail power. The parties
have long fought over the proper calculation of “avoided
cost.” The Sweckers, in response to Midland’s failure to pay
what they view as the correct rate, stopped paying Midland for
retail power. By the fall of 2011 they claimed that Midland
owed them some $60,000 and acknowledged an accumulated
unpaid bill from Midland of about $600. Their failure to pay
the retail bill led Midland, after giving notice and securing the
approval of the Iowa Utilities Board, to begin procedures to
disconnect the Sweckers. As Midland’s purchases from the
Sweckers are effected through the same interconnection as its
supply of retail power, the disconnection had the effect of
ending Midland’s purchases as well. The Sweckers filed
notice of the disconnection with FERC and requested an
expedited order of reconnection.

     After various inconclusive actions, FERC issued the
challenged Order, finding that Midland’s cessation of sales,
and of purchases (as a consequence of the disconnection), did
not fall within any of the exemptions from these duties under
§ 210 or FERC’s regulations. Despite that finding, FERC left
open the question of a utility’s ultimate right to disconnect on
                              4

account of non-payment. Order, 137 FERC ¶ 61,200, PP 29-
39. It then declared: “The Commission orders: (A) Midland
shall reconnect with the Sweckers’ QF for purposes of
purchasing and selling to the QF.” It rejected the requests for
rehearing filed by Midland, the Iowa Utilities Board, and
NRECA, see Order on Rehearing, 142 FERC ¶ 61,207 (2013),
and Midland and NRECA then filed this petition for review.
(As used below, “Midland” refers to both petitioners except
where the context indicates it means only the utility.)

                            * * *

     Midland naturally contends we have jurisdiction, and
FERC appears to acquiesce (except for a claim that petitioners
failed to “urge[]” the issues adequately in their petitions for
rehearing, a claim we need not address). But we are, of
course, obliged to address the question on our own. Basardh
v. Gates, 545 F.3d 1068, 1070 n.1 (D.C. Cir. 2008).

     There are two apparent avenues to our jurisdiction, the
first one directly through the Federal Power Act’s provision
for review (§ 313(b) of the FPA, 16 U.S.C. § 825l(b)), the
second via PURPA § 210’s provision on “enforcement,” 16
U.S.C. 824a-3(h), which is said by Midland to forge a link to
§ 313(b). We take the theories in that order.

     Section 313(b) of the FPA reads as follows as it appears
in the United States Code:

    (b) Judicial review

    Any party to a proceeding under this chapter aggrieved
    by an order issued by the Commission in such proceeding
    may obtain a review of such order in the United States
    court of appeals for any circuit wherein the licensee or
    public utility to which the order relates is located or has
                               5

    its principal place of business, or in the United States
    Court of Appeals for the District of Columbia . . . .

FPA § 313(b), 16 U.S.C. § 825l(b) (emphasis added). Section
210 of PURPA is codified within the same chapter as § 313
(chapter 12 of title 16). Thus, at first glance, Midland appears
to be the exact sort of party “aggrieved by an order” entitled
to review in the court of appeals.

     But as enacted in the Statutes at Large, § 313 uses the
word “Act” where the codifiers used the word “chapter.” See
49 Stat. 860 (“Any party to a proceeding under this Act
aggrieved by an order . . .”). In cases, like this, where the two
versions conflict, the rule is that the Statutes at Large version
controls. “Though the United States Code is ‘prima facie’
evidence that a provision has the force of law, 1 U.S.C.
§ 204(a), it is the Statutes at Large that provides the ‘legal
evidence of laws,’ § 112 . . . .” United States Nat’l Bank of
Ore. v. Independent Ins. Agents of America, Inc., 508 U.S.
439, 448 (1993). Section 210 of PURPA, unlike many other
sections of PURPA, is neither a new section of the FPA nor an
amendment of a pre-existing section. Compare, e.g., 92 Stat.
3144-47 (enacting § 210), with id. 3134-40, 3140-43 (enacting
various PURPA sections that amend the FPA). Given that
§ 313 limits review to orders issued in proceedings under the
Act—and § 210 is not part of the Act—Midland does not
qualify as an “aggrieved party” vis-à-vis the challenged order
(unless § 210 itself somehow changes the picture).

    Midland suggests it does. Specifically, it argues that
PURPA § 210(h) fits the orders here within the language of
FPA § 313(b). Section 210(h) is complex and best seen as a
whole:

    (h) Commission enforcement
                       6

(1) For purposes of enforcement of any rule
prescribed by the Commission under subsection (a)
of this section with respect to any operations of an
electric utility, a qualifying cogeneration facility or a
qualifying small power production facility which are
subject to the jurisdiction of the Commission under
part II of the Federal Power Act [16 U.S.C. § 824 et
seq.], such rule shall be treated as a rule under the
Federal Power Act [16 U.S.C. § 791a et seq.]. . . .
(2)(A) The Commission may enforce the
requirements of subsection (f) of this section against
any State regulatory authority or nonregulated
electric utility. For purposes of any such
enforcement, the requirements of subsection (f)(1) of
this section shall be treated as a rule enforceable
under the Federal Power Act [16 U.S.C. § 791a et
seq.]. For purposes of any such action, a State
regulatory authority or nonregulated electric utility
shall be treated as a person within the meaning of the
Federal Power Act. No enforcement action may be
brought by the Commission under this section other
than—

    (i) an action against the State regulatory
    authority or nonregulated electric utility for
    failure to comply with the requirements of
    subsection (f) of this section or

    (ii) an action under paragraph (1).

(B) Any electric utility, qualifying cogenerator, or
qualifying small power producer may petition the
Commission to enforce the requirements of
subsection (f) of this section as provided in
subparagraph (A) of this paragraph.          If the
                               7

         Commission does not initiate an enforcement action
         under subparagraph (A) against a State regulatory
         authority or nonregulated electric utility within 60
         days following the date on which a petition is filed
         under this subparagraph with respect to such
         authority, the petitioner may bring an action in the
         appropriate United States district court to require
         such State regulatory authority or nonregulated
         electric utility to comply with such requirements, and
         such court may issue such injunctive or other relief
         as may be appropriate. The Commission may
         intervene as a matter of right in any such action.

PURPA § 210(h), 16 U.S.C. § 824a-3(h).

     Midland argues that the orders here “create new rules”
regarding disconnections of retail service for customers’ non-
payment (and do so without using notice-and-comment
rulemaking), and that they then purport to enforce these rules
directly against Midland, “rather than bringing action in
federal court as required” by § 210. Petitioners’ Br. 5.
Midland fits these acts into FPA § 313(b) by invoking
§ 210(h)(2)(A)’s provision that “the requirements of
subsection (f)(1) of [§ 210] shall be treated as a rule
enforceable under the Federal Power Act.” Id. If FERC’s
orders put in issue the application of a “rule under the Federal
Power Act,” it argues, then FPA § 313(b) provides for review
in the court of appeals.

     There are several difficulties with this theory. An initial
one is that § 210(f)(1) addresses only rules prescribed by the
Commission relating to the implementation of § 210 by state
regulatory authorities vis-à-vis any “electric utility for which
it has ratemaking authority,” and Midland is not such a utility.
See Joint Appendix 12; Petitioners’ Br. 14. Moreover,
§ 210(h)(2)(A) provides for treatment of § 210(f)(1)
                               8

requirements “as a rule enforceable under the Federal Power
Act” “for purposes of enforcement.” (Section 210(h)(1) uses
a parallel construction.) In this context, where FERC is not
seeking “enforcement” of the order, it appears irrelevant.

    But most obviously fatal is that FERC never purported to
adopt a general rule on disconnections by utilities whose
customers refused to pay their bills (or conditioned payment
of their bills on concessions regarding “avoided cost”).
Midland cites no rule-creating language in either of the orders.

    Rather than announcing a new general rule, FERC noted
in its Order on Rehearing that the EPAct of 2005 had
expanded its powers. Its most articulate explanation of its
“reconnect” order reads as follows:

    Prior to the Commission’s implementation of section
    210(m) of PURPA, which was added to PURPA by
    EPAct 2005, the Commission, as Midland points out, in
    practice left issues regarding disconnection of QFs for
    nonpayment of bills to state regulatory authorities or
    nonregulated utilities. In implementing EPAct 2005,
    however, the Commission addressed, and provided
    specific regulations on, how an electric utility may
    terminate its obligations to purchase from and sell to QFs.

Order on Rehearing, 142 FERC ¶ 61,207 P 32.

     It is true that the addition of subsection (m) to § 210 (via
the EPAct of 2005) conferred on FERC new authority relating
to the QFs that § 210 benefits. See, e.g., § 210(m)(3)
(authorizing FERC review of utilities’ applications for relief
from mandatory purchase obligations on a territory-wide basis
and allowing the Commission to “make a final determination”
on whether applicant met the specified conditions);
§ 210(m)(4) (stating that FERC “shall issue an order”
                               9

reinstating an obligation to purchase under specified
conditions). But those changes have no effect on our
jurisdiction here (even if they might do so in other cases).
While the Commission developed regulations implementing
the EPAct of 2005, New PURPA Section 210(m) Regulations
Applicable to Small Power Prod. & Cogeneration Facilities,
117 FERC ¶ 61,078 (2006), those regulations, true to the
language of new § 210(m) itself, said nothing whatever about
disconnections for non-payment of bills.

     Further, our prior decisions addressing jurisdiction to
review FERC orders under § 210 have repeatedly emphasized
Congress’s decision to leave § 210’s enforcement to the
district court (subject to review in the relevant court of
appeals). In the first of these, Industrial Cogenerators v.
FERC, 47 F.3d 1231 (D.C. Cir. 1995), for example, we said:

    The FERC implements § 210 by promulgating rules
    designed to encourage cogeneration and small power
    production, 16 U.S.C. § 824a-3(a)-(c); those rules are in
    turn implemented by state regulatory authorities and by
    “each nonregulated electric utility.” 16 U.S.C. § 824a-
    3(f). If an entity of either type fails to implement the
    FERC rules, then the Commission may, upon its own
    motion or upon petition, bring an enforcement action in
    district court to ensure compliance with the Act; if the
    Commission fails to act upon a petition for enforcement,
    then the petitioner may itself bring such an action. 16
    U.S.C. § 824a-3(h)(2)(B). The PURPA does not provide
    any other means by which the FERC or a petitioner can
    force a state regulatory authority or a nonregulated utility
    to comply with § 210 of the Act.

Id. at 1232. Throughout the opinion we stressed Congress’s
decision to vest enforcement of § 210 exclusively in the
district court, and rejected any potential interference with that
                                10

decision.      See id. at 1232 (noting, after reciting
§ 210(h)(2)(B)’s authorization to the Commission, or in
default of its action to a disappointed petitioner, to bring an
enforcement action in district court, “The PURPA does not
provide any other means by which the FERC or a petitioner
can force a state regulatory agency authority or a nonregulated
utility to comply with § 210 of the Act.”), 1234 (“Congress . .
. could not have intended that [review under § 313(b)] be
available where it would disrupt the enforcement scheme
carefully elaborated in § 210. For us to review [the orders
before us], however, would be fundamentally inconsistent
with—would indeed preempt—that enforcement scheme.”),
1235 (“[W]e would think it obvious that the district court is
the superior forum in which to address the question whether
the [state commission] is in violation of any FERC
regulation.”). Our later decisions firmly pursue the same
understanding. See, e.g., New York State Elec. & Gas Corp.
v. FERC, 117 F.3d 1473, 1476 (D.C. Cir. 1997) (“Under this
enforcement scheme it is always the district court that first
passes upon the merits of whatever position the Commission
may take concerning the implementation of the PURPA.”)
(emphasis added); Niagara Mohawk Power Corp. v. FERC,
117 F.3d 1485, 1488 (D.C. Cir. 1997) (“Section 210 sets out a
self-contained scheme by which the purposes of the PURPA
are to be realized.”) (emphasis added).

     Industrial Cogenerators explicitly left open the
possibility of direct review in the court of appeals of FERC
orders under § 210 that “embody[], for example, a rule of
general application, not tied to a particular set of facts . . . .”
47 F.3d at 1236. But in Niagara Mohawk we agreed with
petitioners that the orders in dispute did “announce a rule of
general application,” and we then proceeded to answer—
negatively—the question left open in Industrial Cogenerators:
whether Congress had authorized courts of appeal to review
such an order. Niagara Mohawk, 117 F.3d at 1488. Even in
                               11

that context, we believed that the potential for “unnecessary
conflict” with the district courts was excessive. Id. at 1488-
89. Accordingly, even if Midland were right to characterize
FERC’s action here as having “creat[ed] new rules,” the
principles of Industrial Cogenerators and Niagara Mohawk
would preclude our review.

     We note that on a number of occasions we have in fact
directly reviewed FERC decisions under § 210. See American
Forest & Paper Ass’n v. FERC, 550 F.3d 1179 (D.C. Cir.
2008) (reviewing the 2006 regulations implementing the
EPAct of 2005 and finding FERC’s interpretation of the
statute reasonable); Greensboro Lumber Co. v. FERC, 825
F.2d 518 (D.C. Cir. 1987) (concluding that FERC is allowed
to review and grant waivers for electric utilities’ PURPA
obligations); Ketchikan Elec. Co. v. FERC, No. 01-1126, 2001
WL 1286293 (D.C. Cir. 2001) (per curiam decision affirming
FERC waiver of a utility’s purchase obligation under
PURPA). In none of them, however, did the court even
mention the issue of jurisdiction, and as to jurisdiction,
therefore, those cases have no precedential value. United
States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 69
(1952); Doe v. Exxon Mobil Corp., 473 F.3d 345, 352 (D.C.
Cir. 2007).

     A special characteristic of the orders at issue in Industrial
Cogenerators and its sequels might serve as a basis for
distinction—namely, that the disputed FERC decision was
“much like a memorandum of law,” see Industrial
Cogenerators, 47 F.3d at 1235, and “did not “fix[] the rights
of any party or, indeed, do[] anything more than state how the
FERC interprets its own regulations,” id. at 1234, and “merely
advised the parties of the Commission’s position,” id. at 1235.
See also Niagara Mohawk, 117 F.3d at 1488 (“An order that
does no more than announce the Commission’s interpretation
of the PURPA or one of the agency’s implementing
                               12

regulations is of no legal moment unless and until a district
court adopts that interpretation when called upon to enforce
the PURPA.”); New York State Elec. & Gas Corp., 117 F.3d
at 1477 (D.C. Cir. 1997) (“[T]he Commission did nothing
more than state why in its opinion the challenged rates comply
with the PURPA . . . . [We lack jurisdiction] to review a non-
binding declaratory order . . . .”); Connecticut Valley Elec. Co.
v. FERC, 208 F.3d 1037, 1043 (D.C. Cir. 2000) (“The
Commission has in effect merely ‘announced the position . . .
it would take in any future enforcement action that
[Connecticut Valley] might bring . . . .’”) (citing New York
State Elec.); Xcel Energy Services Inc. v. FERC, 407 F.3d
1242, 1244 (D.C. Cir. 2005) (per curiam decision denying
review of an order which merely announces FERC’s position).
Here, Midland is understandably concerned that the disputed
orders may in fact be mandatory, in the sense that failure to
“comply” could expose it to penalties as high as $1,000,000 a
day under FPA § 316A(b), 16 U.S.C. § 825o-1(b). It is
conceivable that the principles announced in the Industrial
Cogenerators line might not apply to orders with such effects.
(We note, however, that similar discrepancies between the
versions in the U.S. Code and the Statutes at Large, noted in
relation to 16 U.S.C. § 825l(b), are also found here. Compare
49 Stat. 862 with 16 U.S.C. § 825o (same discrepancy);
compare also 119 Stat. 980 with 16 U.S.C. § 825o-1 (Statutes
at Large language only reaching orders under “part II” of the
FPA, which does not include PURPA § 210).

    FERC has, however, manifested no intent that its orders
here would be so far out of the line of its ordinary § 210
orders. The initial “ordering paragraph” mentions neither any
deadline by which it expected Midland to comply nor any
possible consequence of non-compliance. The reasoning in
the Order on Rehearing, quoted above, manifested no intent to
go beyond a statement of FERC’s views of Midland’s
                               13

obligations.   Oral argument tended only to confirm this
reading.

        FERC counsel: [T]raditionally, in the PURPA
    context the Commission would issue a declaratory order
    and nothing more.

        Court: Was it not issuing an order on penalty of
    contempt?

         FERC counsel: The order does not say that. Yes,
    there’s one ordering paragraph that says Midland shall
    reconnect, it doesn’t have a time period by which
    Midland has to comply, it doesn’t say it’s under penalty,
    and in fact, in that same order they are, the Commission
    is ordering settlement procedures to try to get the parties
    to work this out.

Oral Arg. Tr. 23. Similarly, FERC counsel said, “[A]ny time
FERC orders anyone to do anything[,] that is only enforceable
in District Court, the same would be true here.” Id. at 21. It is
true that when asked how a recipient of such an order is
“supposed to think,” FERC counsel replied, “I would treat it
as mandatory, however, they did not seek clarification.” But
that answer seems no more than a claim of ambiguity, a claim
that counsel’s other answers suggested should be resolved in
favor of treating the order as declaratory only. We cannot
imagine that a responsible federal regulatory agency would
intentionally expose a party to fines up to $1,000,000 a day on
the basis of language that left the agency itself so perplexed.
Accordingly we need not now resolve whether such a
mandatory order might somehow fall within our jurisdiction.

    As the case falls squarely within the principles of
Industrial Cogenerators, we lack jurisdiction to review the
orders. As the parties have neither briefed nor argued the
                                 14

question of review in the district court under the
Administrative Procedure Act, we express no opinion on the
subject. Cf. Niagara Mohawk Power Corp. v. FERC, 306
F.3d 1264, 1268-69 (2d Cir. 2002) (denying APA review for a
regulated electric utility on the ground that it could obtain
complete relief through proceedings under § 210(h)(2)(B)).

    The petition for review is

                                                  Dismissed.