Court Opinion

ID: 185390
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:31:25+00
Date Added: 2024-06-11T17:26:15.501165
License: Public Domain

245 F.3d 798 (D.C. Cir. 2001)
Western Power Trading Forum and Coalition of New Market Participants, Petitionersv.Federal Energy Regulatory Commission, Respondent.California Power Exchange Corporation, et al., Intervenors
No. 99-1532
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 26, 2001Decided April 10, 2001

On Petition for Review of Orders of the Federal Energy Regulatory Commission
Ronald N. Carroll argued the cause and filed the briefs for  petitioners.
Laura J. Vallance, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With her on the brief was Dennis Lane, Solicitor.  John H. Conway,  Deputy Solicitor, Lona T. Perry, Attorney, and Susan J.  Court, Special Counsel, entered appearances.
Erik N. Saltmarsh and James H. McGrew were on the  brief for intervenors California Electricity Oversight Board  and California Power Exchange Corporation.  Scott D. Rasmussen entered an appearance.
Before:  Williams, Randolph and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge:

1
As the world well knows, California restructured its electricity market a few years ago.  The  current case arises out of a decision by the Federal Energy  Regulatory Commission approving certain proposals allocating decisionmaking power in the modified market.  In the  fast-moving life of California's energy problems, all but one of  the petitioners' claims have become moot.  For the remaining  claim, the petitioners lack standing.

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3
The case revolves around three novel state entities devised  to play key roles in the new structure:  (1) an Independent  System Operator ("ISO"), which received control of certain  power transmission assets from the state's three major investor-owned utilities and was charged with running a single  statewide transmission grid;  (2) a Power Exchange ("PX"),  which was to be responsible for matching electricity buyers  and sellers in the California market;  (3) an Oversight Board,  which (so far as is relevant here) was vested with review  power over the composition of the ISO and PX boards and  over decisions of the ISO Board.  See Pacific Gas and  Electric Co., 77 FERC p 61,204, at 61,796-98, 61,817 (1996)  ("1996 Order");  see also Cal. Pub. Util. Code §§ 330-97  (West 2000).

4
In its 1996 Order the Federal Energy Regulatory Commission rejected some of the then pending California arrangements.  The primary grounds, as relevant to present purposes, were that the duties of the Oversight Board conflicted with the Commission's responsibilities under the Federal  Power Act ("FPA") and with the "independence principle"  previously adopted by the Commission in its Order No. 888,  requiring that an ISO Board be independent of any market  participant or group of participants.  1996 Order, 77 FERC  at 61,817-18.  See also Order No. 888, Promoting Wholesale  Competition Through Open Access Non-Discriminatory  Transmission Services by Public Utilities;  Recovery of  Stranded Costs by Public Utilities and Transmitting Utilities, 61 Fed. Reg. 21,540, 21,596 (1996), reprinted in, FERC  Stats. & Regs. p 31,036, at 31,730-31 (setting forth independence principle);  Atlantic City Electric Co., 77 FERC  p 61,148, at 61,574 (1996) (affirming independence principle as  "bedrock" policy).  Cf. Transmission Access Policy Study  Group v. FERC, 225 F.3d 667, 738 (D.C. Cir. 2000) (upholding  Order No. 888), cert. granted sub nom. New York v. FERC, ___ U.S. ___, 121 S. Ct. 1185, ___ L.Ed.2d ___ (2001).

5
Three years later the Oversight Board sought the Commission's advance approval of provisions contained in a bill  pending before the California Senate, SB 96.  See Joint  Appendix ("J.A.") at 2.  The bill made several changes to the  California restructuring, aimed at least in part at satisfying  the Commission.  Various sections of the bill provided that  the composition of the ISO and PX boards would "remain in  effect until an agreement with a participating state is legally  in effect."  Id. at 17-18;  see also id. at 6.  First, whereas formerly the Oversight Board was authorized to appoint all  members to the ISO and PX stakeholder boards, SB 96 gave  it only a veto power over proposed board members of specified types:  those "representing agricultural end-users, industrial end-users, commercial end-users, residential end-users,  end-users at large, nonmarket participants, and public interest groups."  Id. at 16;  see also Cal. Pub. Util. Code  335. Second, whereas members of the ISO and PX boards were  previously required to be residents of California, SB 96  instead mandated that they be "electricity customers in the  area served by" the ISO or PX.  J.A. at 17;  see also Cal.  Pub. Util. Code §§ 337-38.  Third, whereas formerly the  Oversight Board was slated to enjoy very broad appellate jurisdiction, SB 96 largely confined it to "[m]atters pertaining  to retail electric service or retail sales of electric energy." J.A. at 18;  see also Cal. Pub. Util. Code  339.

6
The petitioners here--the Western Power Trading Forum  (an organization of electricity generators and marketers, municipal electric companies, power exchanges, and power marketing administrations) and the Coalition of New Market  Participants (an association of participants in the California  electricity markets)--intervened before the Commission,  claiming that the state legislation didn't adequately address  the Commission's concerns about independence and jurisdiction and effectively favored California consumers at the expense of out-of-state producers.  Over their objections the  Commission found that SB 96 properly limited the Oversight  Board's authority to matters within the state's jurisdiction-"find[ing] that this interim role is acceptable in the unique  circumstances presented by the restructuring of California  electricity markets"--and granted the Oversight Board's proposed declaratory order.  California Electricity Oversight  Board, 88 FERC p 61,172, at 61,576 (1999) ("1999 Order"). The Commission later denied rehearing, stressing that it had  not ceded any authority or duties under the FPA.  California  Electricity Oversight Board, 89 FERC p 61,134 (1999).  Petitioners challenge these two orders.

7
As a federal court, we can only adjudicate "actual, ongoing  controversies."  Honig v. Doe, 484 U.S. 305, 317 (1988). Most of this case has lost that character, thanks to a Commission order issued after initial briefing but before oral argument.  Recent California legislation, spurred by the state's  energy crisis, has further mooted all but one of the petitioners' claims.  Since petitioners do not have standing to bring  this remaining claim, we dismiss.

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Petitioners identify three alleged defects in SB 96.  First,  they argue that, because the area served by the ISO and the  PX does not extend beyond the borders of California, the  requirement that ISO and PX board members be electricity customers in the area served by the ISO or the PX, see Cal.  Pub. Util. Code §§ 337-38, is really a "de facto California  residency requirement" of exactly the sort rejected by the  Commission's 1996 Order.  Petitioners' Br. at 35.  Second,  they challenge as a violation of the independence principle the  Oversight Board's veto power over confirmation of ISO and  PX board members, especially those representing "nonmarket participants" and "public interest classes."  Petitioners' Br.  at 30-33.  Third, they attack the curtailed appellate review  power of the Oversight Board as still encroaching on the  Commission's jurisdiction.  Petitioners' Br. at 36-37.

10
A later order of the Commission, not explicitly claimed by  petitioners to be a response to this litigation, has radically undermined the premises of these claims.  See United States  v. W.T. Grant Co., 345 U.S. 629, 632 (1953) (voluntary cessation of conduct alone does not moot a case);  Clarke v. United  States, 915 F.2d 699, 705-06 (D.C. Cir. 1990) (en banc)  (changes wholly independent of litigative process do not fall  under voluntary cessation doctrine).  On November 1, 2000  the Commission proposed that the ISO's current stakeholder  board be replaced with a seven-member non-stakeholder  board and directed parties to file comments by November 22,  2000.  San Diego Gas & Electric Co. v. Sellers of Energy and  Ancillary Services into Markets Operated by the California  Independent System Operator and the California Power Exchange, 93 FERC p 61,121, at 61,364, 61,373 (2000) ("San  Diego I").  And on December 15, 2000 the Commission  followed through, ordering that "the ISO Governing Board be  replaced with a non-stakeholder Board, and that the members  selected to serve on the new Board be independent of market  participants."  San Diego Gas & Electric Co. v. Sellers of  Energy and Ancillary Services into Markets Operated by the  California Independent System Operator and the California  Power Exchange, 93 FERC p 61,294, at 62,013 (2000) ("San  Diego II").  The Commission further held that members of  the current stakeholder ISO Board must "turn over decisionmaking power and operating control to the management of  the ISO" by January 29, 2001 (three days after oral argument  of this case), retaining only an advisory role.  Id.  The Commission also stated its intention to establish further  procedures "to discuss with state representatives the selection process for the new ISO Board."  Id.  The Commission  did not similarly replace the PX's governing board.  Instead,  by releasing the investor-owned utilities from the obligation  to use the PX for energy exchange transactions and terminating the PX's rate schedules effective as of the close of the  April 30, 2001 trading day, it essentially dissolved the PX. Id. at 61,999-62,000.

11
The changes wrought by San Diego II moot the two claims  that bear on the composition of the ISO Board--both the  electricity purchase condition for membership and the provision for veto by the Oversight Board.  By limiting the ISO  Board to an advisory role San Diego II pretty much defenestrates that board, id. at 62,013, and leaves to the Commission's own future rulings any decision of how the new-style  board will be selected.

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The parallel attacks on the composition of the PX Board  are also mooted, though the case is subtler.  By providing for  termination of the PX itself, see id. at 61,999-62,000, San  Diego II puts the PX Board on the road to oblivion.  Petitioners conceded at oral argument that the "Power Exchange ...  under FERC's most recent orders is in the process of winding down and will be going out of business in the near  future," but asserted that "unless and until it actually happens that it's not in business," their claims were not moot. Oral Argument Tr. at 23.  But "[t]o satisfy the Art. III caseor-controversy requirement, a litigant must have suffered  some actual injury that can be redressed by a favorable  judicial decision."  Iron Arrow Honor Society v. Heckler, 464 U.S. 67, 70 (1983).  Given the normal delays of this court's  mandate (for purposes of allowing petitions for rehearing),  and conventional agency delay, judicial resolution of the issue  could not have the slightest real-world impact before April 30  of this year, when the PX's rate schedules expire.  And the  petitioners have not sought to show that the PX is likely to be  revived.  See City of Los Angeles v. Lyons, 461 U.S. 95, 109  (1983).

13
The mootness wrought by San Diego II is, incidentally,  amplified by legislation enacted by California on January 18,  2001, Assembly Bill 5 ("An act to amend Sections 335 and  341.2 of, to add Sections 352 and 352.5 to, and to repeal and  add Section 337 of, the Public Utilities Code, relating to  public utilities, and declaring the urgency thereof, to take  effect immediately") ("AB 5").  This act converted the existing ISO stakeholder governing board into a five-member nonstakeholder board, with all members appointed by the Governor.  AB 5,  3 (2001).  Five members, selected by the  Governor and approved by the Oversight Board, took their  posts three days before oral argument in this case.  See  Letter from Vickie P. Whitney to Members of the Governing  Board, California Independent System Operator (Jan. 23,  2001)(submitted under Circuit Rule 28(j)).  As yet there has  been no Commission evaluation of California's move.

14
Petitioners' remaining challenge is to the undue breadth, as  they see it, of the Oversight Board's power to review substantive decisions of the ISO.  The Commission staunchly argues  that San Diego II's changes also moot this claim, a proposition we find questionable.  Though changes in the criteria for  membership on the ISO Board and the Oversight Board's role  in its selection might be important elements of context, they  seem to leave petitioners' core claim--the risk of Oversight  Board invasion of federal authority--substantially in place. See Motor & Equipment Manufacturers Ass'n v. Nichols,  142 F.3d 449, 458-459 (D.C. Cir. 1998);  Naturist Society, Inc.  v. Fillyaw, 958 F.2d 1515, 1520 (11th Cir. 1992).

15
Whatever the answer on mootness for this final claim,  another jurisdictional hurdle proves insuperable--the absence  of standing.  Only a party that is "aggrieved" by a Commission's order may obtain judicial review, 16 U.S.C.  825l, and  this requires a petitioner to meet both the constitutional and  prudential standing requirements.  Louisiana Energy and  Power Authority v. FERC, 141 F.3d 364, 366 (D.C. Cir. 1998). Constitutional standing requires (among other things) an  injury that is "actual or imminent, not conjectural or hypothetical."  Lujan v. Defenders of Wildlife, 504 U.S. 555, 560  (1992) (internal quotations omitted).  Petitioners' best shot at showing the imminence of such an injury is their claim that  the Oversight Board is by statute, and has shown itself in  practice, biased in favor of the "people of California," and  motivated "to shift costs and burdens to out-of-state market  participants."  Petitioners' Br. at 19-20.  O'Shea v. Littleton,  414 U.S. 488 (1974), suggests that under some circumstances  the prospect of facing adverse action by a discriminatory or  biased tribunal might be enough.  Petitioners submitted in  support of their standing argument the transcript of an  Oversight Board meeting, see Petitioners' Reply Br. Attachment A at 3;  see also Northwest Environmental Defense  Center v. Bonneville Power Administration, 117 F.3d 1520,  1527 (9th Cir. 1997) (allowing affidavits to be submitted on  appeal for the purpose of showing standing), from which one  might perhaps infer such bias.  But as in O'Shea v. Littleton  the claimed injury remains highly speculative.  The only  prospective illegality claimed is that the Oversight Board  might exercise review authority in a way (1) allowed by the  1999 Order, but (2) unlawful under federal law.  At oral  argument petitioners suggested only that the ISO Board  could direct out-of-market purchases (discretionary purchases  outside of set tariffs), and may itself be "bias[ed] to select the  power, for instance, generated by the California municipal  companies."  Oral Argument Tr. at 21.  Yet petitioners fail to  trace this conduct in any way to the review power of the  Oversight Board, much less to an illegal excess in the scope of  that power deriving from the 1999 Order.  Cf. Metcalf v.  National Petroleum Council, 553 F.2d 176, 186-87 (D.C.  1977) (consumers asserting that composition of federal advisory committee would lead to higher costs for petroleum products lacked standing because the occurrence of the harm was  "speculative and conjectural").

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17
The California electricity market is in flux.  The ISO  stakeholder board, which allegedly threatened the interests of  non-California power producers, no longer exists;  San Diego  I & II replace it--as a matter of federal law--with a proposed seven-member non-stakeholder board to be constituted

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in an as yet undetermined way (and as a matter of state law  AB 5 replaces it with a five-member non-stakeholder board  appointed by Governor Gray Davis).  Petitioners tell us that  the various boards involved in the orders under review have  in fact made decisions that undercut the pollyannish view of  them (as petitioners see it) taken by the Commission.  If so,  there may be remedies in the courts or before the Commission.  (The Commission could, for example, seek enforcement  of San Diego II in a United States district court, see 16  U.S.C.  825m, and there may be Commission proceedings by  which petitioners could try to induce such action.)  But no  Commission decision taking or refusing to take such action is  before us;  petitioners identify no way in which our review of  the disputed decisions could remedy the alleged ill effects of  California's current institutional arrangements--other than,  perhaps, by "sending a message."  But message-sending is  not among our powers under Article III.

The petition is

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Dismissed .