Court Opinion

ID: 185116
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:27:59+00
Date Added: 2024-06-11T17:26:13.332039
License: Public Domain

204 F.3d 1144 (D.C. Cir. 2000)
Automated Power Exchange, Inc.,Petitionerv.Federal Energy Regulatory Commission, RespondentPacific Gas and Electric Company, et al., Intervenors
No. 98-1415
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 3, 1999Decided March 7, 2000

[Copyrighted Material Omitted]
On Petition for Review of Orders of the Federal Energy Regulatory Commission
Martin V. Kirkwood argued the cause for petitioner.  With  him on the briefs was Clark Evans Downs.
Andrew K. Soto, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With him on the brief were Jay L. Witkin, Solicitor, and John H. Conway,  Deputy Solicitor.
Before:  Ginsburg, Rogers and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge:

1
Automated Power Exchange, Inc.  ("APX") petitions for review of two orders of the Federal  Energy Regulatory Commission ("FERC") asserting jurisdiction over APX as a public utility within the meaning of the  Federal Power Act and requiring APX to file certain information about itself.  APX operates a computerized marketplace  in which buyers and sellers of electric energy enter into  short-term power supply contracts at prices displayed by the  APX computer, subject to the buy and sell limits established  by market participants.  FERC concluded that because the  APX computer plays a role in setting market price, APX is a  public utility subject to regulation under the Federal Power  Act.  See 16 U.S.C.      824(b) (1994).

2
APX contends that FERC has impermissibly expanded its  limited jurisdiction to include, for the first time, entities that  neither sell nor transmit power in interstate commerce but  only facilitate trades.  Viewing itself as no more than a "high  tech power broker," APX maintains that FERC's orders rely  on a faulty understanding of APX's marketplace and are  contrary to long-standing agency precedent defining the characteristics of a public utility.  APX contends, alternatively,  that assuming FERC's jurisdiction, FERC has arbitrarily  imposed different filing requirements on it than have been  imposed on similarly situated entities.1  Because FERC's interpretation of the Federal Power Act is entitled to deference and FERC has distinguished APX from the entities over  which it previously has declined to assert jurisdiction and has  explained why its decision here is in harmony with its relevant precedent, we deny the petition for review.

I.

3
The instant case began when APX filed an application  requesting that FERC disclaim jurisdiction over its operation,  or, alternatively, grant APX market-based rate authority,  accept for filing its rate schedule to become effective January  1, 1998, and waive prior notice and other filing requirements  and annual charges.  The Federal Power Act ("FPA" or "the  Act") applies to the transmission or sale at wholesale of  electric energy in interstate commerce, see FPA      201(b)(1),  16 U.S.C.      824(b)(1) (1994), and FERC's jurisdiction extends  over all facilities for such transmission or sale of electric  energy.  See id.  As a result, FERC has jurisdiction over any  "public utility," which the Act defines as any person who owns  or operates facilities subject to FERC's jurisdiction.  FPA       201(e), 16 U.S.C.      824(e) (1994).

4
In its application, APX asserted that it will not be a public  utility under the FPA because it will not make sales for resale  of electric power in interstate commerce or transmit electric  energy therein, and will not own or operate any facilities  subject to FERC's jurisdiction.  Furthermore, APX stated  that it will not take title to the electricity which is sold, will  not exercise control over decisions by any market participant  to purchase or sell electricity, and will not dictate prices at  which a buyer or seller must transact.  Rather, APX claimed,  it will serve as an information management agent for buyers  and sellers of electricity that choose to voluntarily trade using  APX's services.  Thus, APX's application put before FERC  the question whether a new market institution that will  operate as an electric power exchange is a public utility as defined in the Federal Power Act and is therefore subject to  FERC's jurisdiction.

5
In the orders under review, FERC acknowledged that the  archetypal "facilities" under the Act are power generating  plants and transmission lines, but also recognized that the  phrase "facilities ...  for sale" has long been read broadly to  include, among other intangibles, contracts used by resellers. See Automated Power Exchange, Inc., 82 FERC p 61,287 at  p. 62,106 (1998) ("Hearing Order");  see also Hartford Elec.  Light Co. v. FPC, 131 F.2d 953, 961 (2d Cir. 1942);  Citizens  Energy Corp., 35 FERC p 61,198 at p. 61,453 (1986).  FERC  recognized that APX does not own or operate either traditional physical facilities used to transmit power or paper facilities  used to resell power.  However, FERC had recognized a new  kind of public utility in recent decisions concerning the California Power Exchange ("CalPX"), a state-created marketplace that operates in the geographic area in which APX  seeks to compete.  In its CalPX orders, FERC had construed  the FPA's provision covering facilities for wholesale sale of  electricity to include the operators of a power exchange if the  operator exercises "effective control" over sales in the marketplace, Pacific Gas and Elec. Co. et al, 77 FERC p 61,204  at p. 61,805 (1996) ("First CalPX Order") or, alternatively, if  the operator is an "integral part of the transactional chain."Southern Cal. Edison Co., 80 FERC p 61,262 at p. 61,946  (1997) ("Second CalPX Order").2  FERC thus concluded that,  like CalPX, APX also exercised "effective control" over sales  in its market and was an "integral part of the transactional  chain" because "APX will determine the market price at  which energy will be sold, and [ ] it will take the combined  actions of the seller and buyer participants as well as APX to effectuate wholesale sales."  Hearing Order, 82 FERC at p.  62,108;  see also Automated Power Exchange, Inc., 84 FERC  p 61,020 at p. 61,085-86 (1998) ("Rehearing Order").  FERC  rejected the argument that APX was more like the computerized bulletin board system over which FERC had disclaimed  jurisdiction in Continental Power Exchange, 68 FERC  p 61,235 (1994), noting that unlike APX's market, participants  in Continental's system determined price through direct negotiation.  See Hearing Order, 82 FERC at p. 62,108-09.Upon denying the petition for rehearing, FERC ordered APX  to file a "detailed description and explanation of its services,  including the calculation of market price, fees, and all relevant terms" as described in its order.  Rehearing Order, 84  FERC at p. 61,089-91.

II.

6
To appreciate the substance of APX's challenges to the  orders under review and FERC's reasoning, some background concerning changes in the electric power industry and  how the APX market operates is needed.

7
At the end of the twentieth century, the wholesale electric  power industry was undergoing a significant transformation. Beginning with Congress' decision to mandate that certain  power generators be allowed to "wheel" power,3 the traditional monopoly structure of the power industry began breaking  down, see Campaign for a Prosperous Georgia v. SEC, 149  F.3d 1282, 1284 (11th Cir. 1998), so that by the mid-1990s a  wholesale market for low-cost power generated by a variety  of power sellers had emerged and traditional vertically integrated utilities were competing for sales of power at wholesale.  FERC, in response to enactment of the Energy  Policy Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776, 290521 (1992), codified at 42 U.S.C.       13201-13556 (1994), promulgated Order No. 888, Promoting Wholesale Competition  Through Open Access Non-Discriminatory Transmission  Services by Public Utilities, 61 Fed. Reg. 21,540 (1996),  codified as revised at 18 C.F.R. Pts. 35 & 385 (1999),4 which  "transformed the competitive environment."  Louisiana Energy and Power Auth. v. FERC, 141 F.3d 364, 370 (D.C. Cir.  1998).  As a result, FERC notes in it brief, the industry now  consists of a variety of electric power sellers and power  marketers, which purchase and resell power generated by  others.  APX seeks to market its services to participants in  the electric power market in the western United States, of  which California is the hub, consuming nearly half of the  power generated in the entire region.  As of 1997, approximately 100 entities traded power in the western market; furthermore, according to FERC, 650 entities in addition to  the owners and operators of physical facilities have applied to  act as middlemen (resellers) of power nationwide.5

8
Prior to the emergence of power exchanges, the industry  had developed standardized power contracts covering five  periods of time, ranging from power for the following month  to power in the next hour.6  Of these, the most prevalent have been contracts formed in the spot market for next-day  and hour-ahead power.  According to APX's brief, beginning  in the mid-1980s, buyers and sellers in both the long-term  and spot markets found each other through power brokers or  power marketers,7 a practice that made sense when the  universe of potential buyers and sellers was small, and considerations other than price were at issue.  The arrival of  market-based rate authority, and open access tariffs has  sparked an interest among industry participants to eschew  brokers and marketers in favor of trading power in a marketplace, particularly in the spot market where transaction costs  have come to be perceived as too high.

9
To spur development of such a marketplace, the California  Public Utilities Commission ("CPUC") created the California  Power Exchange.  Buyers and sellers submit bids to CalPX,  which ranks, evaluates, and matches the bids.  Bids are  phrased in terms of megawatt hours whereby participants  offer to contract, for example, for power to be delivered during the peak hours the following day.  There is one round  of bidding, after which CalPX assesses the aggregate supply  and demand for each hour of power.  Although CalPX is not  formally a party to the contracts, CalPX matches buyers and  sellers for each hour of power at a price and on terms  determined by CalPX.  See First CalPX Order, 77 FERC at  p. 61,806-07.  To ensure that an adequate supply of power  would be available in the fledgling market, the CPUC directed the three largest investor-owned public utilities in California to sell their entire power supply through the CalPX  through the year 2001.  See id. at p. 61,803-05.

10
APX was established to compete with CalPX.  Like CalPX,  APX operates separate hourly markets, although APX's market is more expansive, dividing California into two power  zones and allowing participants to contract for up to 168  hours (one week's worth) of power.8  Unlike in CalPX's  market, bidding is ongoing in the APX market and prices  fluctuate from the opening of trading until trading stops  shortly before delivery.  However, price fluctuations in the  APX market are a function of the APX computer's algorithm  rather than a reflection of direct price negotiations by market  participants.  Thus, when a new hourly market opens, the APX computer, acting as electronic auctioneer, displays an  initial price per megawatthour based on the price for power  of the same hour of the day in the previous seven days. Responding to the initial price, participants enter buy or sell  orders.  The orders specify the quantity sought or offered,  and may contain price or time limits within which the APX  computer shall fulfill an order.  If neither limitation is set,  the order remains pending until matched, and is for whatever  is the market price displayed by the APX computer at the  time the computer finds a matching order.  Then, after  displaying the initial price, the APX computer alters the price  periodically in response to the activity of the participants. The price does not fluctuate with each new order placed. Rather, at certain unspecified intervals, the APX computer  clears the market by matching as many buy and sell orders as  it can at the then-displayed price.  This matching process  forms binding contracts.9  The market-clearing process continues throughout the 168-hour period in which trading for  that hour of power occurs, happening with increasing frequency as the time for delivery approaches.  Each time after  clearing the market, the APX computer alters the displayed  price, raising it if the majority of unmatched orders are to  buy (demand exceeds supply) and lowering it if unmatched  orders are to sell (supply exceeds demand).  The amount of  the price fluctuation is a function of the APX computer's nonpublic algorithm.

11
Consequently, the phrase "market price" when used in  relation to the APX marketplace describes the price APX's  computer estimates to be most likely to clear the market  rather than the more common meaning in other contexts, i.e., a price at which willing buyers and sellers have agreed to  trade.10  While participants can set the price range or price  limits, only APX can set the final price at which the sale is  actually transacted. APX acknowledges that it could have  designed its computer program to allow participants to negotiate price by including a price term in their respective offers,  but APX considered that a less efficient means of operating a  power exchange.  Although APX considers its computergenerated "market price" to be a feature likely to attract  participants to its market, from FERC's perspective, it is  precisely this feature that makes APX a public utility.

III.

12
APX challenges FERC's assertion of jurisdiction over it on  several grounds.  First, APX contends that the plain meaning  of "sale" in the FPA or as construed previously by FERC and  the courts limits FERC's jurisdiction to those entities that as  "public utilities" transmit or take title to power.  Second,  APX contends that even if the language of the FPA can  reasonably be interpreted to include as a "public utility" an  entity that exercises control over sales without taking title to  power, FERC's interpretation was arbitrary and capricious  because it failed to follow or explain its departure from its  precedents distinguishing the jurisdictional treatment of power brokers and power marketers.  Third, APX contends that  even if FERC's statutory interpretation is consistent with its  precedent, FERC arbitrarily applied that interpretation to  the APX market by concluding that the price-setting feature  of APX's computer made APX more like CalPX, over which  FERC had asserted jurisdiction, than like the computerized  bulletin board system over which FERC had disclaimed  jurisdiction in Continental Power Exchange, 68 FERC p 61,235 (1994).  Finally, APX contends that even if it is  subject to FERC's jurisdiction, FERC arbitrarily imposed  filing requirements on it different from those imposed on  similarly situated entities.

13
The court reviews FERC's statutory interpretation under  the now-familiar framework announced in Chevron U.S.A.  Inc. v. NRDC, Inc., 467 U.S. 837, 842-43 (1984).  Relying on  the traditional tools of statutory construction, the court first  considers whether Congress addressed the precise question  at issue.  See Southern Cal. Edison Co. v. FERC, 195 F.3d  17, 22-23 (D.C. Cir. 1999).  If Congress left ambiguous how  the FPA is to apply to power exchanges, the court will uphold  FERC's interpretation so long as it is reasonable.  See id.  Even if FERC's statutory interpretation might otherwise be  reasonable, however, FERC must also interpret the Act  consistently with its own precedent or explain its reasons for  departure therefrom.  See Louisiana Pub. Serv. Comm'n v.  FERC, 184 F.3d 892, 897 (D.C. Cir. 1999).  Finally, when  applying its interpretation of the Act, FERC must demonstrate that it has made a reasoned decision based upon  substantial evidence in the record.  See Sithe/Independence  Power Part., L.P. v. FERC, 165 F.3d 944, 948 (D.C. Cir.  1999).

14
APX's threshold contention--that either the plain meaning  of the FPA or FERC precedent limits FERC jurisdiction to  entities that, unlike APX, take title to the power--merits  little discussion.  The phrase "facilities ...  for [wholesale]  sale" of electricity admits of more than one meaning.  Power  exchanges such as APX did not exist when Congress enacted       201 of the FPA, and while this fact alone does not foreclose  the possibility that Congress enacted language directed at the  precise issue at hand, it makes that possibility unlikely.11  Moreover, the breadth of the statutory language and the  absence of other indicia of congressional intent concerning the  jurisdictional treatment of exchanges like APX demonstrates  that Congress did not address the precise question at hand.See, e.g., Military Toxics Project v. EPA, 146 F.3d 948, 958  (D.C. Cir. 1998);  Formula v. Heckler, 779 F.2d 743, 758-59  (D.C. Cir. 1985).  Consequently, the question becomes, under  Chevron's second step, whether FERC's construction of the  FPA is reasonable.  Again, given the breadth of the statutory  language, FERC's interpretation of "facilities ... for [wholesale] sale" as encompassing facilities used to exercise effective  control over the sale in a power exchange is a permissible  construction of the FPA.  Additionally, the FERC precedent  on which APX relies does not limit public utilities to those  entities that take title to power.  See, e.g., Washington Water  Power Co., 74 FERC p 61,033 at p. 61,083-84 (1996);  Citizens  Energy Corp., 35 FERC at p. 61,453.

15
APX's next contention, that FERC's statutory interpretation in the orders under review is inconsistent with its  precedents concerning power brokers and power marketers,  fares no better.  APX acknowledges that FERC relied on its  statutory interpretation announced in the CalPX orders, but  APX contends that interpretation is unlawful.  Prior to the  emergence of power exchanges, FERC had distinguished  between power marketers (or resellers)--which were subject  to FERC jurisdiction because they took title to electricity and  therefore used contracts as paper facilities for the wholesale  sale of electricity--and power brokers, which were not subject to FERC jurisdiction because they only acted as agents  of the principals and had no proprietary interest in the  electricity being purchased.  See Citizens Energy Corp., 35  FERC at p. 61,452-53.12  APX maintains that it is no more than a "high tech power broker" and that, therefore, the  orders under review are contrary to Citizens, where FERC  claimed jurisdiction because the non-profit organization would  take title to power as a reseller, and that FERC has failed to  offer a reasoned explanation for its departure from precedent.

16
Yet, FERC's decision in Citizens is not fairly read to have  held that an entity owns facilities for the wholesale sale of  electric power if, and only if, that entity takes title to the  power.  Similarly, in the power broker and related precedents cited by APX, FERC's reasoning did not address a  situation in which an entity did not take title but played a role  in setting the price at which wholesale power sales would  occur.  See Washington Water Power Co., 74 FERC at p.  61,084 ("Washington Power represents that it would not have  the obligation or ability to initiate, control, or change a  transaction.");  Idaho Power Co., 74 FERC p 61,149 at p.  61,524 (1996) (similar);  cf. LG & E Power Marketing, Inc., 68  FERC p 61,247 at p. 62,125 (1994).  Therefore, when FERC  addressed how the FPA applies to power exchanges, it was  not obliged to distinguish its power broker/power marketer  precedents.13

17
APX maintains that even if the CalPX orders and Continental are the correct frame of reference, and that a power  exchange is a public utility when it exercises effective control  over sales, FERC arbitrarily concluded that APX exercised  such control like CalPX and unlike Continental.  FERC in  fact recognized that APX does not play as interventionist a  role as CalPX in pairing buyers and sellers and in setting the  terms of their transactions, but the material similarity it  identified was that the APX computer selects a price within  the range set by participants and that price may be different  from the price the participants would have selected had they  engaged in direct negotiations.  See Rehearing Order, 84  FERC at p. 61,086;  Hearing Order, 82 FERC at p. 62,108.APX somewhat misses the point in its response that this  observation is "irrelevant" because participants in its market  voluntarily submit to its "price setting" role and are, therefore, not controlled by APX.  FERC concluded that even if,  under its current terms of service, APX may face economic  disincentives from setting price at the highest possible point  within the participants' range, because APX had the power to  set a price different from one that would have resulted from  direct negotiations, APX exercised effective control over sales  in its market.  Thus, FERC's analysis suffices to show that  voluntary participation in APX's marketplace does not make  irrelevant the potential gap between the APX-set price and a  directly-negotiated price.

18
However, there is some force to APX's argument that it is  materially different from CalPX because all participants in  APX's marketplace, unlike some of those in the CalPX market, can choose not to trade through APX's system at any  time and can carefully calibrate their bids through price and time limits.  FERC's analysis might have delved deeper into  why the power to select a price within a range set by  participants gives APX "control" over sales even when APX  market participants, presumed to be rational profit-seekers,  choose to rely on APX's computer to determine a market clearing price in lieu of direct negotiations, power brokers,  CalPX, or any other marketplaces that may develop, particularly given that participants can exit from the APX marketplace at any time should inequities or more attractive alternatives appear.  It is also true, as APX contends, that, under  the Federal Power Act, Congress did not vest FERC with  general jurisdiction over all participants in the wholesale  electric power industry, regardless of whether the industry  undergoes significant transformation not anticipated by Congress.  See Chemehuevi Tribe of Indians v. FPC, 420 U.S.  395, 422-24 (1975);  Henry v. FPC, 513 F.2d 395, 401 (D.C.  Cir. 1975).

19
Nonetheless, Congress chose broad language to describe  FERC's jurisdiction, and, under the applicable deferential  standard of review, see Public Util. Comm'n of the State of  California v. FERC, 143 F.3d 610, 615 (D.C. Cir. 1998), the  court cannot say that FERC unreasonably concluded that  facilities used to exercise control over wholesale sales are  subject to its jurisdiction and that the power to establish the  price at which sales will take place, notwithstanding market  participants' voluntary acquiescence in the exercise of such  power, is sufficient to demonstrate such control.  Although  the roles APX and CalPX play in their respective markets  differ in certain respects, FERC could reasonably focus,  consistent with the standards it has adopted for operators of  power exchanges, on the power to set price as being indicative of exercising control over wholesale sales of electricity. With respect to that criterion, the record supports FERC's  view that APX is more like CalPX than Continental.  Indeed,  APX acknowledged in its brief that it "is no mere bystander  in the market it operates." At oral argument APX conceded  that participants who bid in the APX market are obliged to  accept the price APX sets within the overlapping range  established by the participants' bids, a price which, in theory, could always be set at the highest point in that range without  the knowledge of participants or ratepayers.  These acknowledgments are tantamount to a concession that APX is a de  facto third party to the buyer-seller transaction, and, thus,  that its services make it an integral part of the transaction.

20
Although FERC may conclude after a period of experience  in the new computerized market for electricity that regulation  of such entities as APX is no longer necessary, FERC could  reasonably conclude in the orders under review that the  manner in which APX participates in the sale and purchase  makes it a de facto third party to the transaction and not  simply a bystander that provides information that the parties  can accept or reject.  While the parties voluntarily decide to  use APX's services and can set limits on the prices at which  they will sell and buy, they are bound to the market price  that APX sets within those limits once they submit a bid.  So  far as the record indicates, FERC has no way to determine at  this point exactly where APX will set the market price;  there  is no experience to show whether the APX price may always  be on the high end or, conversely, on the low end, of the  parties' price range.  Similarly, because APX treats information concerning the frequency of market clearing as a proprietary trade secret, it is unclear from the record how  responsive the APX market price is likely to be to participants' bidding behavior, and, consequently, bidders' time  limits may afford insufficient leverage.  Notwithstanding  FERC's determination that prices set by APX for its services  will be fair and just, it remains to be seen whether preferences or other forms of discrimination or unfairness may  result from APX's operations.

21
Under these circumstances, FERC's determination is reasonable even if participants in APX's market have decided  that savings from the lower transaction costs of the APX  pricing system outweigh any of its disadvantages relative to a  market-based, directly-negotiated pricing system.  Although  FERC might have taken a different tack, relying instead on  indirect monitoring of APX through review of filings by public  utilities that participate in the APX marketplace, see 16  U.S.C.      824d(c);  LG&E Power Marketing, Inc., 68 FERC at p. 62,124, its decision to assert jurisdiction directly over APX  is consistent with the Act and the standards FERC has  adopted for power brokers and resellers.  In time, FERC  may agree that APX's price "setting" activities reflect the  collective actions of the voluntary, profit-seeking participants  in a market, and is undertaken as an agent of the parties  rather than as an independent agent;  but deference to  FERC's expertise is due where it concludes that APX's de  facto third-party role is substantively different from that of a  traditional power broker over which FERC has previously  disclaimed jurisdiction.

22
Finally, APX's challenge to the filing requirements FERC  imposed is unpersuasive.  In many respects, FERC has  treated APX like other public utilities that lack market  power, granting it the same waivers as those utilities.  See  Rehearing Order, 84 FERC at p. 61,086;  Hearing Order, 82  FERC at p. 62,110.  To the extent that APX has been treated  differently, that treatment flows from the differences between  the role APX plays in jurisdictional sales, and the role played  by other public utilities granted market-based rate authority.FERC has no prior experience with a market like the one  APX operates and it is entirely possible that the type of  information it seeks to have filed, namely, a detailed statement concerning APX's business, could ultimately cause  FERC to conclude, in light of experience with the APX  market, that there is no need for APX to be regulated.  In  the meantime, the court cannot conclude that FERC's filing  requirements are arbitrary inasmuch as those requirements  are reasonably related to FERC's legitimate regulatory concerns and to the differences between APX and other public  utilities.  APX's objections cannot overcome the fact that how  APX adjusts the price goes to the essence of FERC's jurisdictional concern--to ensure that APX's rate-setting and  power sales mechanisms are "just, reasonable, and not unduly  discriminatory or preferential."  Hearing Order, 82 FERC at  62, 107.

23
Accordingly, we deny the petition for review.

Notes:

1
 The petitions of APX and the California Power Exchange Corporation ("CalPX") challenging FERC's imposition of the annual fee  paid by other public utilities have become unripe as a result of  FERC's decision to waive the annual fee until it has conducted a  general review of the issue.  See PJM Interconnection, L.L.C., 88  FERC p 61,109 at p. 61,257-58 (1999);  on reh'g, 89 FERC p 61,133  (1999).  Accordingly, the court granted petitioners' motion to dismiss CalPX's appeal in No. 98-1419 and that portion of APX's  petition challenging the annual fee.  See Automated Power Exch. v.  FERC, 1999 WL 1215753 (D.C. Cir. Nov. 30, 1999).

2
 Because FERC's jurisdiction over CalPX had not been contested, FERC had pithily described that the key attributes of CalPX's  operations that rendered it jurisdictional were that CalPX would  control sales in its market by aggregating supply and demand,  setting price, and matching buyers and sellers, see, e.g., First CalPX  Order, 77 FERC at p. 61,806-07, and that CalPX was a necessary  intermediary through which all sales would take place.  See Second  CalPX Order, 80 FERC at p. 61,946.

3
 "Wheeling" involves a transfer by direct transmission or displacement electric power from one utility to another over the  facilities of an intermediate utility.  See Public Utilities Regulatory  Policies Act of 1978, 16 U.S.C.       796(17)-(18), 824a-3, 824i, 824k  (1994);  Otter Tail Power Co. v. United States, 410 U.S. 366, 368  (1973);  Richard D. Cudahy, Retail Wheeling:  Is This Revolution  Necessary?, 15 Energy L.J. 351, 351 & n.2 (1994);  cf. Association of  Oil Pipe Lines v. FERC, 83 F.3d 1424, 1429 (D.C. Cir. 1996).

4
 For the revisions and clarifications of Order No. 888, see 76  F.E.R.C. p 61,009 (1996), 76 F.E.R.C. p 61,347 (1996), and 79  F.E.R.C. p 61,182 (1997), on reh'g, Order No. 888-A, 62 Fed. Reg.  12274 (1997), on reh'g, Order No. 888-B, 81 F.E.R.C. p 61,248  (1997), on reh'g, Order No. 888-C, 82 F.E.R.C. p 61,046 (1998), on  appeal sub nom. Transmission Access Policy Study Group, et al. v.  FERC, No. 97-1715 (D.C. Cir.) (submitted November 3, 1999).

5
 This number does not necessarily reflect 650 new entrants  because a number of traditional utilities are divesting themselves of  their generating facilities and focusing on the transmission business.See, e.g., Second CalPX Order, 80 FERC at p. 61,944.

6
 Long-term (month-ahead) contracts are designed to meet easily  foreseeable demand in order to assure that a utility whose demand  routinely exceeds its own supply can meet its baseload requirements, to supplement power to meet seasonal demand, or to assist  in financing investment in power generation.  Since 1996, the New  York Mercantile Exchange has provided a market in which monthlong contracts can be traded.  By contrast, short-term contracts  meet less foreseeable demand, such as that caused by a heatwave,  and are divided into periods of (1) 23 days (power each day during  the 16 hours of peak demand);  (2) 6 days (same);  (3) next-day  (peak or off-peak);  and (4) hour-ahead.

7
 A power broker seeks out potential buyers or sellers on behalf  of an undisclosed principal and proposes the terms on which the  principal is willing to deal.  At oral argument, it was clarified that  once a compatible counterpart has been identified and the broker  either commences, or even concludes, negotiations, at some point  the broker steps back from the transaction, which is concluded  directly between principals.  Thus, while the broker may have  facilitated price negotiations, the principals have not bound themselves to accept the price the broker negotiates.  Unlike a broker, a  power marketer is a reseller who may not own or operate generating or transmission facilities but who purchases (takes title) to  power and then resells (conveys title) it to its customers.  See  generally Citizens Energy Corp., 35 FERC p 61,198 (1986).

8
 Because each hour of power is traded separately, prices will  fluctuate for each hour.  For example, assume it is 10:00 a.m on  Monday, November 22, 1999.  Consistent with current practice,  APX allows for purchase of hour-ahead power, i.e., from 11:00 a.m.  to 12:00 p.m. of that day through and until one week from that  point.  If the price per megawatt for the period between 11:00 a.m.  to 12:00 p.m. is X, the price for power from 12:00 p.m. to 1:00 p.m.  could be Y;  and the price for the 1:00 p.m. to 2:00 p.m. period could  be Z;  and so on until 168 hours later:  9:00 a.m. to 10:00 a.m. of the  following Monday.  When it becomes 11:00 a.m. on Monday, November 22, trading stops for the hour of 11:00 a.m. to 12:00 p.m. and  trading opens for the next hour one week later, i.e. 10:00 a.m. to  11:00 a.m. on Monday, November 29, 1999, and all hours prior.Thus, at any given time, the APX markets cover the next 168 hours.And the markets in each of the two California zones are independent so that the price of power from 10:00 a.m. to 11:00 a.m. on  November 22nd may differ between zones.

9
 For example, if a seller offered to sell at or above $8.00 per  megawatthour and a buyer offered to buy at or below $8.20 per  megawatthour, and the APX Market Price at the time of clearing  was $8.05 per megawatthour, the computer would clear those orders  by forming a contract between the two parties for $8.05 per  megawatthour.  This example, furnished by the parties, assumes a  bilateral contract, but in reality it will more often be the case that  contracts formed through the APX market will be multilateral,  although the role of the APX Market Price is unchanged.

10
 See, e.g., Associates Commercial Corp. v. Rash, 520 U.S. 953,  117 S. Ct. 1879, 1884 & n.2 (1997);  United States v. 50 Acres of  Land, 469 U.S. 24, 25 n.1 (1984);  United States v. Cartwright, 411  U.S. 546, 551 (1973);  Recording Indus. Ass'n of Am. v. Librarian of  Congress, 176 F.3d 528, 533 (D.C. Cir. 1999).

11
 Indeed, contrary to APX's position, the Second Circuit, in a  pre-Chevron case in which the court specifically avoided reliance on  the pre-Chevron form of judicial deference to administrative expertise, understood the plain meaning of "facilities" to be a "widely  inclusive term, embracing anything which aids or makes easier the  performance of the activities involved in the business of a person or  corporation."  Hartford, 131 F.2d at 961, 966.

12
 Citizens involved a non-profit organization that sought to act as  both a power broker and a power marketer.  With respect to the  brokering services, FERC opined that no question of jurisdiction  0appeared to arise.  See Citizens Energy Corp., 35 FERC at p. 61,452.  However, FERC asserted jurisdiction over Citizens with  respect to its reselling services because it would be using paper  facilities, such as contracts, accounts, and records, to engage in  wholesale sales of electric power in interstate commerce.  See id. at  p. 61,453.

13
 APX also contends that FERC's integral-to-the-transaction  standard is inconsistent with other precedents in which FERC had  held that an entity that schedules wholesale sales but that does not  take title to power was not a public utility.  See Idaho Power Co.,  74 FERC at p. 61,524-25.  APX's contention would have force were  FERC's standard read to include any actor without whom transactions may not occur.  But FERC made clear that to the extent its  standard carries with it a "but for" component, that component is  limited to those entities essential for a transaction to take place at a  specific price.  See Hearing Order, 82 FERC at p. 62,108 ("But for  APX's intervention in the process, wholesale sales transactions  between buyers and sellers will not necessarily occur at the specified market price.").
With respect to APX's contention that FERC failed to consider  whether it need assert jurisdiction over APX in order to protect  consumers inasmuch as FERC regulates sellers participating in  APX transactions, because APX did not raise this issue before  FERC in its rehearing request, the court lacks jurisdiction to  consider it under FPA      313(b).  See Granholm ex rel. Michigan  Dep't of Natural Resources v. FERC, 180 F.3d 278, 282 (D.C. Cir.  1999).