Court Opinion

ID: 9566029
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:32:11.517331+00
Date Added: 2024-06-11T09:19:17.277738
License: Public Domain

BETTY B. FLETCHER, Circuit Judge,
concurring:
I concur in the majority opinion but sound a note of concern and caution. The filed-rate doctrine was developed in the context of filed tariffs that were subject to the usual regulatory process — a time and procedure for public comment and complaint and room for disallowance or adjustment by the regulators. Courts have expanded its application of the doctrine to market-based rates as being FERC-au-thorized and entitled to the same deference as filed rates, deeming them to be just and reasonable because FERC supposedly actively regulates and oversees the setting of rates. However, I find no evidence that FERC has set a standard for the determination of what is a just and reasonable rate nor have the courts done so. I fear we talk a better game than we play.1
We have held in our electricity cases that establishment of a market-based rate as a FERC-authorized rate requires active FERC oversight of the market. See Pub. Util. Dist. No. 1 of Grays Harbor County Wash. v. IDACORP Inc. (“Grays Harbor”), 379 F.3d 641, 651 (9th Cir.2004) (“The fact that the rates at issue in this case are market based does not alter this conclusion.... Before allowing Idaho Power Company to charge market-based rates, FERC first confirmed that Idaho Power Company did not have, or had adequately mitigated, market power in generation and transmission and could not erect other barriers to entry. Idaho Power Co., 78 F.E.R.C. ¶ 61,343, 1997 WL 139585, at *1 (Mar. 27, 1997). Further, the ability to charge market-based prices comes with certain filing requirements, including providing FERC with individual service agreements for contracts such as the one at issue here. See id. at *3. Even in the context of market-based rates, FERC actively regulates and oversees the setting of rates.”); Pub. Utility Dist. No. 1 of Snohomish County v. Dynegy Power Marketing, Inc., 384 F.3d 756, 762 (9th Cir.2004) (“Snohomish”) (“Because FERC has exclusive jurisdiction over interstate sales of wholesale electricity, and continues to engage in regulatory activity, we affirm.”). At a minimum, active oversight requires periodic FERC inquiries into the status of *1050the market to ensure that no seller or combination of sellers may exercise market power and that the market-based rates being charged are just and reasonable. Without minimum standards for FERC oversight, the Filed Rate Doctrine threatens to come unmoored from its rationale of respecting the actions of a federal agency to which Congress has delegated authority. Instead, I fear respect is being given to agency passivity, allowing anticompetitive and otherwise illegal actions to escape review.

. A provocative article in the New York Times, September 4, 2007, compares electricity rates of states that regulate and those that allow market forces to set rates suggesting non-regulating states have startlingly higher rates.