Court Opinion

ID: 3049778
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:28:33.027294+00
Date Added: 2024-06-11T11:49:21.624556
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

PORT OF SEATTLE, WASHINGTON,          
                        Petitioner,
IDACORP ENERGY; WILLIAMS POWER
COMPANY INC.; CITY OF TACOMA,
WASHINGTON; SOUTHERN CALIFORNIA
EDISON COMPANY; CONSTELLATION
POWER SOURCE INC.; EL PASO
MERCHANT ENERGY L.P.; MORGAN
STANLEY CAPITAL GROUP, INC.;
TRACTEBEL ENERGY MARKETING
INC.; BP ENERGY CO.,
                      Intervenors,
                v.
FEDERAL ENERGY REGULATORY                   No. 03-74139
COMMISSION,                                 FERC No.
                      Respondent,         Federal Power Act
M-S-R PUBLIC POWER AGENCY;
DUKE ENERGY TRADING AND
MARKETING, LLC; PUGET SOUND
ENERGY; CITY OF LOS ANGELES
DEPARTMENT OF WATER AND
POWER; SEMPRA ENERGY TRADING
CORP.; ENERGY PLUS LLC;
NORTHERN CALIFORNIA POWER
AGENCY,
                      Intervenors,

PORT OF SEATTLE,
             Applicant-Intervenor.
                                      

                           10395
10396              PORT OF SEATTLE v. FERC

CITY OF SEATTLE,                       
                         Petitioner,
IDACORP ENERGY L.P.;
PEOPLE OF THE STATE OF
CALIFORNIA; PORT OF SEATTLE;
DUKE ENERGY NORTH AMERICA,
LLC, DUKE ENERGY TRADING AND
MARKETING, LLC, (COLLECTIVELY,
“DUKE ENERGY”); CITY OF TACOMA,
                      Intervenors,
BENTON COUNTY, FRANKLIN
COUNTY, GRANT COUNTY;
TRANSCANADA ENERGY; PUBLIC
SERVICE COMPANY OF COLORADO;                 No. 03-74472
POWEREX CORP.; CALIFORNIA
INDEPENDENT SYSTEM OPERATOR                  FERC No.
CORPORATION; ALCOA INC.;                   Federal Power Act
COLUMBIA FALLS ALUMINUM
COMPANY, LLC; WILLIAMS POWER
COMPANY INC.; CALIFORNIA
ELECTRICITY OVERSIGHT BOARD;
PORTLAND GENERAL ELECTRIC
COMPANY; NORTHERN CALIFORNIA
POWER AGENCY; EL PASO
MERCHANT ENERGY L.P.,
                      Intervenors,
                v.
FEDERAL ENERGY REGULATORY
COMMISSION,
                      Respondent,
                                       
                 PORT OF SEATTLE v. FERC   10397

AVISTA CORPORATION; AVISTA           
ENERGY; THE CITY OF LOS ANGELES
DEPARTMENT OF WATER AND
POWER; SEMPRA ENERGY; PUGET
SOUND ENERGY; PINNACLE WEST
COS.; CONSTELLATION ENERGY
COMMODITIES GROUP, INC.; BP
ENERGY CO.; TRACTEBEL ENERGY         
MARKETING INC.; M-S-R PUBLIC
POWER AGENCY; MODESTO
IRRIGATION DISTRICT (MID); THE
CITY OF SANTA CLARA; CITY OF
REDDING; CORAL POWER; PPL
ENERGYPLUS, LLC; PPL MONTANA,
                      Intervenors.
                                     
10398             PORT OF SEATTLE v. FERC

CITY OF TACOMA, WASHINGTON,           
                        Petitioner,
DUKE ENERGY NORTH AMERICA,
LLC, DUKE ENERGY TRADING AND
MARKETING, LLC, (COLLECTIVELY,
“DUKE ENERGY”); CALIFORNIA
ATTORNEY GENERAL; PORT OF
SEATTLE,
                      Intervenors,
                v.
FEDERAL ENERGY REGULATORY
COMMISSION,
                      Respondent,           No. 03-74769
IDACORP ENERGY L.P.; PINNACLE               FERC No.
WEST CAPITAL CORPORATION;                 Federal Power Act
NORTHERN CALIFORNIA POWER
AGENCY; AVISTA ENERGY INC.;
AVISTA CORPORATION; M-S-R
PUBLIC POWER AGENCY; PUBLIC
SERVICE COMPANY OF COLORADO;
CITY OF LOS ANGELES
DEPARTMENT OF WATER AND
POWER; SEMPRA ENERGY TRADING
CORP.; PUBLIC SERVICE COMPANY OF
NEW MEXICO; PPL ENERGYPLUS;
PPL MONTANA; CORAL POWER,
LLC,
                      Intervenors.
                                      
                PORT OF SEATTLE v. FERC             10399

PUGET SOUND ENERGY,                 
                      Petitioner,
              v.
FEDERAL ENERGY REGULATORY
COMMISSION,
                    Respondent,

DUKE ENERGY NORTH AMERICA,
LLC, DUKE ENERGY TRADING AND
MARKETING, LLC, (COLLECTIVELY,
“DUKE ENERGY”); CITY OF TACOMA,
WASHINGTON; CALIFORNIA
INDEPENDENT SYSTEM OPERATOR
CORPORATION; PUBLIC SERVICE
COMPANY OF COLORADO; SEMPRA               No. 04-70110
ENERGY TRADING CORP.; CITY OF
LOS ANGELES DEPARTMENT OF
                                          FERC No.
                                           EL-01-10
WATER AND POWER; PINNACLE
WEST CAPITAL CORPORATION,
(PNW); CORAL POWER, LLC;
TRANSCANADA ENERGY LTD.;
WILLIAMS POWER COMPANY INC.;
NORTHERN CALIFORNIA POWER
AGENCY, (NCPA); PORT OF
SEATTLE WASHINGTON; M-S-R
PUBLIC POWER AGENCY; THE
MODESTO IRRIGATION DISTRICT
(“MID”), THE CITY OF SANTA
CLARA, CALIFORNIA (“SANTA
CLARA”) AND THE CITY OF REDDING,
CALIFORNIA (“REDDING”);
CALIFORNIA ELECTRICITY OVERSIGHT
BOARD;
                                    
10400             PORT OF SEATTLE v. FERC

ALCOA INC.; COLUMBIA FALLS            
ALUMINUM COMPANY, LLC
(“CFAC”); MORGAN STANLEY
CAPITAL GROUP, INC.; PACIFICCORP;
PEOPLE OF THE STATE OF                
CALIFORNIA, ex rel. BILL LOCKYER,
Attorney General,
            Applicants-Intervenors.
                                      

PEOPLE OF THE STATE OF                
CALIFORNIA; BILL LOCKYER,
Attorney General,
                       Petitioners,
                v.
                                            No. 04-70185
FEDERAL ENERGY REGULATORY
COMMISSION,                                 FERC No.
                       Respondent,           EL-01-10

MORGAN STANLEY CAPITAL GROUP,
INC.,
           Applicant-Intervenor.
                                      
                  PORT OF SEATTLE v. FERC              10401

PEOPLE OF THE STATE   OF               
CALIFORNIA,
                         Petitioner,
CITY OF TACOMA, WASHINGTON;
PORT OF SEATTLE, WASHINGTON,
                       Intervenors,
IDACORP ENERGY L.P.; CALIFORNIA
ELECTRICITY OVERSIGHT BOARD;
TRANSCANADA ENERGY LTD;
BENTON, FRANKLIN AND GRANT
COUNTY, WASHINGTON PUBLIC
UTILITY DISTRICTS; THE CALIFORNIA
INDEPENDENT SYSTEM OPERATOR
CORPORATION; COLUMBIA FALLS
ALUMINUM COMPANY, LLC; ALCOA,
                                             No. 04-70703
                                       
INC.; PORTLAND GENERAL ELECTRIC
COMPANY; BONNEVILLE POWER                     FERC No.
ADMINISTRATION; POWEREX CORP.;             Federal Power Act
BENTON COUNTY; FRANKLIN
COUNTY; GRANT COUNTY,
WASHINGTON,
                       Intervenors,
                v.
FEDERAL ENERGY REGULATORY
COMMISSION,
                       Respondent,
BP ENERGY COMPANY;
CONSTELLATION ENERGY
COMMODITIES GROUP, INC.; CITY OF
LOS ANGELES DEPARTMENT OF
WATER AND POWER; SEMPRA
ENERGY TRADING CORP.; PUGET
                                       
10402             PORT OF SEATTLE v. FERC

SOUND ENERGY, INC.; AVISTA            
ENERGY, INC.; CORAL POWER,
L.L.C.; NORTHERN CALIFORNIA
POWER AGENCY; THE M-S-R PUBLIC
POWER AGENCY; MODESTO
IRRIGATION DISTRICT (MID);
CITY OF SANTA CLARA, CALIFORNIA;
CITY OF REDDING, CALIFORNIA;          
PINNACLE WEST COMPANIES; PUBLIC
SERVICE COMPANY OF COLORADO;
PPL ENERGYPLUS, LLC; PPL
MONTANA, LLC; AVISTA
CORPORATION,
                      Intervenors.
                                      

CALIFORNIA PUBLIC UTILITIES           
COMMISSION,
                                            No. 04-71189
                        Petitioner,
               v.                           FERC No.
                                             EL-01-10
FEDERAL ENERGY REGULATORY
                                             OPINION
COMMISSION,
                      Respondent.
                                      
         On Petition for Review of an Order of the
          Federal Energy Regulatory Commission

                  Argued and Submitted
        January 8, 2007—San Francisco, California

                   Filed August 24, 2007

  Before: Sidney R. Thomas, M. Margaret McKeown, and
             Richard R. Clifton, Circuit Judges.
    PORT OF SEATTLE v. FERC    10403
  Opinion by Judge Thomas;
Concurrence by Judge McKeown
10406             PORT OF SEATTLE v. FERC
                         COUNSEL

Gary D. Bachman (argued), Cheryl Feik Ryan, Howard E.
Shapiro, and Meredith Berger Chambers, Van Ness Feldman,
PC, Washington, D.C., for petitioner and intervenor Puget
Sound Energy, Inc.

Philip L. Chabot, Jr., McCarthy, Sweeney & Harkaway, PC,
Washington, D.C., for petitioner and intervenor Port of Seat-
tle.

Rex S. Heinke (argued), Akin Gump Strauss Hauer & Feld,
LLP, Los Angeles, California; and G. Philip Nowak, Jerry E.
Rothrock, and David A. Elder, Akin Gump Strauss Hauer &
Feld, LLP, Washington, D.C., for petitioner and intervenor
City of Seattle.

Michael J. Kurman and J. Michael Carr, Jr., Arent Fox PLLC,
Washington, D.C., for petitioner and intervenor City of
Tacoma.

Bill Lockyer, Richard M. Frank, and Thomas Greene, Office
of the Attorney General of the State of California, Sacra-
mento, California; Kevin J. McKeon (argued), Lillian S. Har-
ris (argued), and Katherine E. Lovette, Hawke, McKeon,
Sniscak & Kennard LLP, Harrisburg, Pennsylvania; and
David M. Gustafson, Office of the Attorney General of the
State of California, Oakland, California, for petitioner and
intervenor the People of the State of California ex rel. Bill
Lockyer, Attorney General.

Erik N. Saltmarsh and Victoria S. Kolakowski, California
Electricity Oversight Board, Sacramento, California, for peti-
tioner and intervenor California Electricity Oversight Board.

Randolph Wu, Arocles Aguilar, Mary F. McKenzie, Sean H.
Gallagher, and Traci Bone, Public Utilities Commission of the
State of California, San Francisco, California, for petitioner
                  PORT OF SEATTLE v. FERC             10407
and intervenor Public Utilities Commission of the State of
California.

Cynthia A. Marlette, Dennis Lane, and Robert H. Solomon
(argued), Federal Energy Regulatory Commission, Washing-
ton, D.C., for respondent Federal Energy Regulatory Com-
mission.

Randy Coach and Peter J. Burger, Bonneville Power Admin-
istration, Portland, Oregon; and Karin J. Immergut and Jeff
Handy, Office of the United States Attorney for the District
of Oregon, Portland, Oregon, for intervenor Bonneville Power
Administration.

Michael B. Early, Portland, Oregon, for intervenors Alcoa
Inc. and Columbia Falls Aluminum Company, LLC.

Gary D. Bachman (argued), Cheryl Feik Ryan, Howard E.
Shapiro, and Meredith Berger Chambers, Van Ness Feldman,
PC, Washington, D.C., for intervenor Avista Corporation and
Avista Energy, Inc.

Mark R. Haskell, Morgan, Lewis & Bockius LLP, Washing-
ton, D.C., for intervenor BP Energy Company.

Ronald N. Carroll and Melissa A. Burt, Foley & Lardner LLP,
Washington, D.C.; and Lisa M. Decker and Randall D. Ost-
een, Constellation Energy Commodities Group, Inc., Balti-
more, Maryland, for intervenor Constellation Energy
Commodities Group, Inc.

Jeffrey D. Watkiss, Bracewell & Guiliani, LLP, Washington,
D.C., for intervenor Coral Power LLC.

Kenneth W. Irvin, McDermott Will & Emery LLP, Washing-
ton, D.C., for intervenor El Paso Marketing, LP.
10408              PORT OF SEATTLE v. FERC
Lawrence G. Acker, Brett A. Snyder, and Roshini Thayapa-
ran, LeBoeuf, Lamb, Greene & Macrae, LLP, Washington,
D.C., for intervenor IDACORP Energy LP.

Rockard J. Delgadillo, Richard M. Brown, and Marcia Haber
Kamine, Office of the City Attorney of Los Angeles, Los
Angeles, California; and Howard E. Shapiro and Patricia F.
Godley, Van Ness Feldman, P.C., Washington, D.C., for
intervenor City of Los Angeles Department of Water and
Power.

Wallace L. Duncan, James D. Pembroke, Peter J. Scanlon,
and Sean M. Neal, Duncan, Weinberg, Genzer & Pembroke,
PC, Washington, D.C., for intervenors Modesto Irrigation
District, City of Santa Clara, California, City of Redding, Cal-
ifornia, and the M-S-R Public Power Agency.

Robert C. McDiarmid, Lisa G. Dowden, and Meg Meiser,
Spiegel & McDiarmid, Washington, D.C., for intervenor
Northern California Power Agency.

John D. McGrane and Suzanne K. McBride, Morgan, Lewis
& Bockius LLP, Washington, D.C.; and Timothy Bolden,
Pinnacle West Capital Corporation, Phoenix, Arizona, for
intervenors Pinnacle West Capital Corporation and Arizona
Public Service Company.

V. Denise Saunders, Portland General Electric Company,
Portland, Oregon; and Cheryl M. Foley, Skadden, Arps, Slate,
Meagher & Flom LLP, Washington, D.C., for intervenor Port-
land General Electric Company.

Paul W. Fox, Andrea M. Kearney, and Deanna E. King,
Bracewell & Guiliani LLP, Austin, Texas; J. Clifford Gunter
III, Andrew M. Edison, and Erin Glenn Busby, Bracewell &
Guiliani LLP, Houston, Texas; and David C. Frederick
(argued) and Scott H. Angstreich, Kellogg, Huber, Hansen,
                   PORT OF SEATTLE v. FERC                 10409
Todd, Evans & Figel, PLLC, Washington, D.C., for interve-
nor Powerex Corp.

Donald A. Kaplan and John Longstreth, Preston Gates Ellis &
Rouvelas Meeds LLP, Washington, D.C., for intervenors PPL
EnergyPlus, LLC, and PPL Montana, LLC.

John T. Stough, Jr., and Kevin M. Downey, Hogan & Hart-
son, Washington, D.C., for intervenor Public Service Com-
pany of New Mexico.

Bonnie S. Blair, Mark L. Parsons, and Margaret E. McNaul,
Thompson Coburn LLP, Washington, D.C., for intervenors
the public utility districts of Benton, Franklin, and Grant
Counties, Washington.

Margaret A. Moore, Howard E. Shapiro, and Vincenzo
Franco, Van Ness Feldman, PC, Washington, D.C.; Alan Z.
Yudkowsky, Stroock & Stroock & Lavan LLP, Los Angeles,
California; and Richard I. Beitler, Sempra Energy Trading
Corp., Stamford, Connecticut, for intervenor Sempra Energy
Trading Corp.

                          OPINION

THOMAS, Circuit Judge:

   This is another in a series of cases arising out of the energy
crisis that occurred in California and other western states in
2000 and 2001. We are asked to review the decision by the
Federal Energy Regulatory Commission (“FERC” or “Com-
mission”) to deny refunds to wholesale buyers of electricity
that purchased energy in the short-term supply market at
unusually high prices in the Pacific Northwest. We are also
asked to review FERC’s decision to exclude from any poten-
tial refund those transactions involving energy purchased in
10410              PORT OF SEATTLE v. FERC
the Pacific Northwest for consumption in California. We con-
clude that we have jurisdiction over FERC’s decision to deny
refunds, and that FERC abused its discretion in denying
potential relief for transactions involving energy that was ulti-
mately consumed in California. We also conclude that in
determining whether refunds were warranted, FERC should
have considered new evidence of intentional market manipu-
lation submitted by the parties with FERC’s approval. At this
time, we decline to reach all other issues raised by the parties.
We grant the petitions for review in part and remand this case
to FERC to address the market manipulation evidence, to
include the California-consumed energy in its analysis, and to
further consider its refund decision in light of related, inter-
vening opinions of this court.

                                I

    The California energy crisis serves as the backdrop of this
litigation. That crisis has been well-documented, see, e.g.,
Pub. Utils. Comm’n of State of Cal. v. FERC, 462 F.3d 1027,
1036-44 (9th Cir. 2006) (“Pub. Utils. Comm’n”); Bonneville
Power Admin. v. FERC, 422 F.3d 908, 910-14 (9th Cir. 2005)
(“BPA”); Cal. ex rel. Lockyer v. FERC, 383 F.3d 1006, 1008-
11 (9th Cir. 2004) (“Lockyer”), and a full recitation of its his-
tory is unnecessary here.

   In the mid-1990’s, the California legislature deregulated the
electricity market, ostensibly to reduce energy prices for con-
sumers. Act of September 23, 1996, 1996 Cal. Legis. Serv.
854 (codified at Cal. Pub. Util. Code §§ 330-398.5). Shortly
thereafter, for a variety of reasons related to the deregulation
and other market factors, wholesale electricity prices skyrock-
eted. In May 2000, for instance, average prices in the Califor-
nia short-term supply market, also known as the “spot
market,” were twice as high as average prices in May 1999.
Pub. Utils. Comm’n, 462 F.3d at 1040. In June 2000, the first
in a series of power blackouts occurred in Northern Califor-
nia, potentially as the result of market manipulation. Id.
                    PORT OF SEATTLE v. FERC                 10411
   The effects of this crisis were felt in other areas of the west-
ern energy market as well, as “dysfunctions in the spot mar-
kets operated by the [California Independent System
Operator] and California Power Exchange (PX) affected the
prices in the Pacific Northwest,” due to the “integrated nature
of the Western markets.” Puget Sound Energy, Inc., et al., 103
FERC ¶ 61,348 at 62,366-67 (2003) (“June 25, 2003 Order”).
The Pacific Northwest is defined as Idaho, Oregon, and
Washington, as well as parts of Montana, Nevada, Utah, and
Wyoming. 16 U.S.C. § 839a(14).

   Prices in the Pacific Northwest spot market skyrocketed
during the energy crisis. Other factors, such as an extreme
reduction in energy supply due to drought, also contributed to
the crisis in the Pacific Northwest, a region that relies heavily
on water flow through hydroelectric dams to generate electric-
ity. Puget Sound Energy, Inc., et al., 96 FERC ¶ 63,044 at
65,385 (2001) (“September 24, 2001 ALJ Report”). Unlike
the California spot market, which operated through a central-
ized power exchange using a central clearing price, the Pacific
Northwest spot market operated through bilateral contracts
negotiated independently between buyers and sellers, without
a central clearing price. June 25, 2003 Order, 103 FERC
¶ 61,348 at 62,367. Most of these contracts were entered into
under the terms of the Western Systems Power Pool
(“WSPP”) Agreement, a standard form contract for electricity
sales. September 24, 2001 ALJ Report, 96 FERC ¶ 63,044 at
65,386.

   Under the Federal Power Act (“FPA”), all rates charged by
a public utility — defined, confusingly, as a non-
governmental entity, BPA, 422 F.3d at 917 — must be “just
and reasonable, and any such rate or charge that is not just
and reasonable is hereby declared to be unlawful,” 16 U.S.C.
§ 824d(a). Under § 206 of the FPA, FERC has the authority
to investigate, on its own initiative or at the request of a com-
plaining party, whether a particular rate is “just and reason-
able.” Pub. Utils. Comm’n, 462 F.3d at 1045. If FERC finds
10412              PORT OF SEATTLE v. FERC
a rate “unjust, unreasonable, unduly discriminatory or prefer-
ential,” it must determine a just and reasonable rate and order
that rate to be “observed and in force.” 16 U.S.C. § 824e(a)
(2004); Pub. Utils. Comm’n, 462 F.3d at 1045. FERC may
also order sellers to pay refunds to those who bought energy
at the unjust or unreasonable rate. 16 U.S.C. § 824e(b) (2004);
Pub. Utils. Comm’n, 462 F.3d at 1045. Such refunds are lim-
ited to a fifteen-month period following the “refund effective
date,” which is a date FERC establishes that may be no earlier
than sixty days after the filing of the complaint or, in the case
of a § 206 proceeding instituted by FERC of its own accord,
sixty days after FERC publishes notice of its intention to initi-
ate the proceeding. 16 U.S.C. § 824e(b) (2004). FERC may
not order any refunds for the period before the filing of the
complaint or the sixty-day period immediately following that
filing. Id.; Pub. Utils. Comm’n, 462 F.3d at 1045.

   Pursuant to the FPA, San Diego Gas & Electric (“SDG &
E”) filed a complaint with FERC regarding the skyrocketing
energy prices in California. See BPA, 422 F.3d at 912-13.
Shortly thereafter, on October 26, 2000, Puget Sound Energy
(“Puget”) — one of the parties now supporting FERC’s deci-
sion — filed a complaint with FERC requesting price caps for
sales of capacity or energy into Pacific Northwest wholesale
power markets. Puget requested a prospective price cap equal
to the lowest cap established by FERC in the California mar-
kets. Puget’s complaint alleged that the California and Pacific
Northwest markets were part of the same integrated market of
the Western Interconnection, and that market conditions in
California influenced market conditions in the Pacific North-
west. The complaint also requested that FERC set a refund
effective date, to the extent refunds were necessary, sixty days
after the filing of the complaint, or December 25, 2000, the
earliest possible refund effective date pursuant to 16 U.S.C.
§ 824e(b). FERC’s notice of the Puget complaint was pub-
lished in the Federal Register on November 8, 2000, stating
that “[t]he Complaint seeks a refund effective date, to the
extent any refund is called for, of sixty days after the filing
                   PORT OF SEATTLE v. FERC               10413
of the Complaint.” Puget Sound Energy, Inc., et al.; Electric
Rate and Corporate Regulation Filings, 65 Fed. Reg. 66,986
(Nov. 8, 2000).

   On December 15, 2000, shortly after finding that prices in
the California spot markets were unjust and unreasonable,
Pub. Utils. Comm’n, 462 F.3d at 1041; San Diego Gas &
Elec. Co., et al., 93 FERC ¶ 61,121 at 61,349 (2000), FERC
dismissed Puget’s complaint, San Diego Gas & Elec. Co., et
al., 93 FERC ¶ 61,294 at 62,019 (2000) (“December 15, 2000
Order”). Puget filed a timely request for rehearing on January
12, 2001. On April 26, 2001, in response to the SDG & E
complaint, FERC imposed price caps on sales in the Califor-
nia spot markets and instituted a “West-Wide 206 Investiga-
tion” into rates in spot markets outside of California,
believing that such rates might be unjust and unreasonable.
San Diego Gas & Elec. Co., et al., 95 FERC ¶ 61,115 at
61,365 (2001) (“April 26, 2001 Order”). Then, on June 19,
2001, acknowledging that “the California market is integrated
with those of other states in the [West],” FERC adopted “a
market monitoring and mitigation plan for the [western] spot
markets.” San Diego Gas & Elec. Co., et al., 95 FERC
¶ 61,418 at 62,567-68 (2001) (“June 19, 2001 Order”). The
“need for uniform pricing throughout the Western region”
made this plan necessary. Id. at 62,568. FERC also ordered
market participants to engage in settlement discussions, with
the goal of settling past accounts. Id. at 62,570. Three days
later, FERC clarified that the settlement proceeding was not
limited to “California-related matters” but could also focus on
“settling past accounts related to sales in the Pacific North-
west.” San Diego Gas & Elec. Co., et al., 95 FERC ¶ 61,425
at 62,583 (2001) (“June 22, 2001 Order”).

   Also on June 22, 2001, Puget filed a motion to dismiss and
a notice that it was withdrawing its complaint, explaining that
the June 19, 2001 Order instituting price mitigation in the
Pacific Northwest satisfied its complaint. On July 9, 2001, the
Port of Seattle and the City of Tacoma filed an answer oppos-
10414              PORT OF SEATTLE v. FERC
ing Puget’s motion, explaining that a dismissal would preju-
dice other entities in the Pacific Northwest that relied on
Puget’s complaint. On the same day, the City of Seattle and
the Attorney General of Washington filed late motions to
intervene as well as answers in opposition to Puget’s notice
of withdrawal. Although it does not normally grant late inter-
ventions, FERC granted the late motions to intervene filed by
the City of Seattle and the Attorney General of Washington
because “over the course of the SDG&E proceeding, [FERC]
has expanded the scope of its focus from just California to
include the entire Western interconnect and also to implicate
wholesale spot market transactions of non-public utilities.”
San Diego Gas & Elec. Co., et al., 96 FERC ¶ 61,120 at
61,504 (2001) (“July 25, 2001 Order”). The next day, July 26,
2001, the Port of Seattle and the City of Tacoma also filed
late motions to intervene in the Puget proceeding. FERC
granted those motions as well.

    In its July 25, 2001 Order, FERC noted that there had been
little time during the California settlement discussions to
address issues raised by the Pacific Northwest parties. Id. at
61,520. As a result, FERC directed “all parties to the Puget
Sound complaint proceeding to participate in [a separate pre-
liminary evidentiary proceeding] and to focus on settling past
accounts related to spot market sales in the Pacific Northwest.
Interested parties to the SDG&E proceeding may participate
at their discretion.” Id. at 61,520-21. The purpose of the “sep-
arate preliminary evidentiary proceeding,” FERC explained,
would be to “facilitate development of a factual record on
whether there may have been unjust and unreasonable charges
for spot market bilateral sales in the Pacific Northwest for the
period beginning December 25, 2000 through June 20, 2001.”
Id. at 61,520.

  The preliminary evidentiary proceeding took place from
August 1, 2001, to September 17, 2001. The administrative
law judge (“ALJ”) expedited the proceeding by limiting dis-
covery responses to four business days, prohibiting deposi-
                   PORT OF SEATTLE v. FERC               10415
tions, and conducting a three-day hearing in which cross-
examination was frequently waived. September 24, 2001 ALJ
Report, 96 FERC ¶ 63,044 at 65,300. The ALJ found that
although prices in the California energy markets affected
prices in the Pacific Northwest, “this was not the only thing
driving up the prices” there. Id. at 65,370. The ALJ also found
no evidence of the exercise of market power in the Pacific
Northwest, id. at 65,369, and found that the Pacific Northwest
spot market “performed as a competitive market” during the
relevant period, id. at 65,386. As a result, the ALJ determined
that prices were not unjust or unreasonable and that refunds
were unwarranted. Id. at 65,385. The ALJ also determined
that transactions in the Pacific Northwest spot market involv-
ing energy that was consumed in California could not be
refunded in the Pacific Northwest proceeding because such
transactions were beyond the scope of the Puget complaint.
Id. at 65,331.

   On May 6, 2002, FERC released on its website documents
relating to Enron’s manipulation of the California energy mar-
kets. According to the parties seeking refunds, this new evi-
dence also reflected on market manipulation in the Pacific
Northwest because some of Enron’s tactics relied on the
import and export of electricity to and from California and the
Pacific Northwest. The parties seeking refunds also allege that
Enron relied on counterpart energy sellers in the Pacific
Northwest to carry out its manipulative strategies.

   In response to this newly-released evidence of Enron’s
intentional market manipulation, some of the parties filed
motions to reopen the evidentiary record in the Puget com-
plaint. On December 19, 2002, FERC agreed to reopen the
evidentiary record, giving the parties until February 28, 2003,
to submit “additional evidence concerning potential refunds
for spot market bilateral sales transactions in the Pacific
Northwest for the period January 1, 2000 through June 20,
2001 and proposed new and/or modified findings of fact.”
Puget Sound Energy, Inc., et al., 101 FERC ¶ 61,304 at
10416              PORT OF SEATTLE v. FERC
62,221 (2002) (“December 19, 2002 Order”). FERC later
extended the deadline for submitting additional evidence to
March 17, 2003. Puget Sound Energy, Inc., et al., 102 FERC
¶ 61,163 at 61,444 (2002).

   After receiving the new evidence and holding oral argu-
ment, FERC ruled on the ALJ’s findings. A divided three-
commissioner panel agreed with the ALJ, denying the request
for refunds for energy purchases in the Pacific Northwest spot
market. June 25, 2003 Order, 103 FERC ¶ 61,348 at 62,367;
Puget Sound Energy, Inc., et al., 105 FERC ¶ 61,183 (2003)
(“November 10, 2003 Order”). FERC did not, however,
respond to or take into account the new evidence of Enron’s
market manipulation submitted with FERC’s approval. FERC
also declined to make an explicit finding as to whether spot
market prices in the Pacific Northwest were unjust or unrea-
sonable, instead concluding that even if prices were unreason-
able, the balance of factors tipped against ordering refunds.
June 25, 2003 Order, 103 FERC ¶ 61,348 at 62,367. These
equitable factors included, inter alia, (1) the presence in the
Pacific Northwest market of governmental entities not subject
to FERC’s jurisdiction and thus not liable for refunds, (2) the
unfairness of awarding refunds to parties that imprudently
relied on the spot market for their energy needs, (3) the
adverse consequences refunds might have on the market, and
(4) the time and effort required to calculate refunds in the
Pacific Northwest bilateral spot market. Id. at 62,367-69.
FERC also affirmed the recommendation of the ALJ to
exclude from the refund proceeding transactions involving
energy that was ultimately consumed in California. November
10, 2003 Order, 105 FERC ¶ 61,183 at 61,964 n.43; Puget
Sound Energy, Inc., et al., 106 FERC ¶ 61,109 at 61,368
(2004) (“February 9, 2004 Order”). Commissioner Massey
dissented, stating that he would order refunds from the refund
effective date, December 25, 2000, through June 20, 2001.
June 25, 2003 Order, 103 FERC ¶ 61,348 at 62,370.

  In this appeal, governmental entities from the Pacific
Northwest — the City of Seattle, the Port of Seattle, and the
                   PORT OF SEATTLE v. FERC                 10417
City of Tacoma, all of which purchased, on the whole, more
electricity during the energy crisis than they sold — petition
for review of FERC’s decision to deny refunds. The State of
California, the Public Utilities Commission of California, and
the California Electricity Oversight Board (“the California
Parties”), petition for review of FERC’s decision to exclude
from the refund proceeding transactions involving energy that
was ultimately consumed in California, as well as FERC’s
decision to deny refunds. These parties will be referred to,
collectively, as the “Refund Proponents.” Supporting FERC’s
decision to deny refunds are the Bonneville Power Adminis-
tration, Puget — the public utility that filed the initial com-
plaint in this proceeding but which now opposes refunds —
and many other public utility intervenors. These parties will
be referred to, collectively, as the “Refund Opponents.”

                               II

   We review FERC orders to determine whether they are “ar-
bitrary, capricious, an abuse of discretion, unsupported by
substantial evidence, or not in accordance with law.” Cal.
Dep’t of Water Res. v. FERC, 341 F.3d 906, 910 (9th Cir.
2003). We defer to FERC’s factual findings if those findings
are supported by substantial evidence. 16 U.S.C. § 825l(b);
Bear Lake Watch, Inc. v. FERC, 324 F.3d 1071, 1076 (9th
Cir. 2003). Substantial evidence “ ‘means such relevant evi-
dence as a reasonable mind might accept as adequate to sup-
port a conclusion.’ ” Bear Lake Watch, 324 F.3d at 1076
(quoting Eichler v. SEC, 757 F.2d 1066, 1069 (9th Cir.
1985)). “ ‘If the evidence is susceptible of more than one
rational interpretation, we must uphold [FERC’s] findings.’ ”
Id. (quoting Eichler, 757 F.2d at 1069) (alteration in original).
We review questions of law de novo. Am. Rivers v. FERC,
201 F.3d 1186, 1194 (9th Cir. 1999). FERC’s interpretation
of the FPA is reviewed under the analysis established in
Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S.
837, 842 (1984), and its progeny, BPA, 422 F.3d at 914.
10418               PORT OF SEATTLE v. FERC
   As a threshold matter, we must determine whether we have
jurisdiction to review FERC’s decision to deny refunds for
energy transactions in the Pacific Northwest. FERC contends
that we lack jurisdiction to review its denial of refunds
because this decision is committed to agency discretion by
law.

   [1] We lack jurisdiction to review “an agency’s decision
not to prosecute or enforce, whether through civil or criminal
process.” Heckler v. Chaney, 470 U.S. 821, 831 (1985); 5
U.S.C. § 701(a)(2). This is because “an agency decision not
to enforce often involves a complicated balancing of a num-
ber of factors which are peculiarly within its expertise,” such
as questions about the best use of the agency’s resources.
Heckler, 470 U.S. at 831. The Supreme Court has cautioned,
however, that this exception to judicial review is a narrow
one, id. at 838; Citizens to Preserve Overton Park, Inc. v.
Volpe, 401 U.S. 402, 410 (1971), overruled on other grounds
by Califano v. Sanders, 430 U.S. 99 (1977), limited to those
situations in which there is no meaningful standard against
which to judge an agency’s decision not to act, Heckler, 470
U.S. at 830. In those situations, the concern is that courts
should not intrude upon an agency’s prerogative to pick and
choose its priorities, and allocate its resources accordingly, by
demanding that an agency prosecute or enforce. Thus, Heck-
ler limited the presumption of unreviewability to “agency
refusals to institute investigative or enforcement proceed-
ings.” Id. at 838 (emphasis added). When an agency has insti-
tuted proceedings, meaningful standards exist to review what
the agency has done: “when an agency does act to enforce,
that action itself provides a focus for judicial review, inas-
much as the agency must have exercised its power in some
manner. The action at least can be reviewed to determine
whether the agency exceeded its statutory powers.” Id. at 832
(emphasis in original). See also MCI Telecomms. Corp. v.
FCC, 917 F.2d 30, 41-42 (D.C. Cir. 1990) (“It is one thing for
the FCC to decline to investigate a tariff in the first place; that
decision is entrusted to its unreviewable discretion. It is quite
                  PORT OF SEATTLE v. FERC               10419
another for it to note the importance of a question concerning
a tariff, request and take evidence from the parties, and hold
a hearing on the matter. . . .”). Accordingly, where FERC has
made a determination to adjudicate a dispute or take steps
towards enforcing a violation of the law, the outcome it
chooses is subject to judicial review under the standards of
review set forth in the Administrative Procedure Act
(“APA”). 5 U.S.C. § 706; Cal. Dep’t of Water Res., 341 F.3d
at 910.

   [2] That is the case here. FERC has already made a deci-
sion to commit resources to an examination of whether
refunds are warranted for certain energy transactions in the
Pacific Northwest for a period of time in 2000 and 2001. In
response to the filing of a complaint, FERC has held hearings
and taken evidence to adjudicate a dispute between the parties
as to whether refunds should be awarded. Although the steps
FERC has taken do not require FERC to find that refunds are
appropriate, FERC’s decision regarding the propriety of
awarding refunds is reviewable by this court. Indeed, we reg-
ularly exercise judicial review over FERC’s decision to grant
or deny refunds, Pub. Utils. Comm’n, 462 F.3d 1027 (review-
ing decision to grant refunds); Lockyer, 383 F.3d 1006
(reviewing decision to deny refunds); Consol. Edison Co. of
N.Y., Inc. v. FERC, 347 F.3d 964 (D.C. Cir. 2003) (reviewing
decision to deny refunds), and we do so here.

                             III

   We also must decide whether FERC erred in finding that
Puget’s original complaint, which launched the Pacific North-
west refund proceeding, was not withdrawn as a matter of law
in July 2001. If FERC erred and the opinion was withdrawn,
the entire Pacific Northwest evidentiary proceeding before the
ALJ, as well as FERC’s subsequent decision to deny refunds,
would be procedurally barred. If, on the other hand, we deter-
mine that Puget’s complaint was not withdrawn, we must
decide whether the Puget complaint failed to set a refund
10420              PORT OF SEATTLE v. FERC
effective date, which is a statutory requirement for seeking
refunds. In other words, Puget and the Refund Opponents ask
us to affirm the outcome below on procedural grounds, rather
than reach the merits. This we decline to do.

                               A

   [3] As a threshold matter, we conclude that Puget has
standing to assert this challenge, even though it was the pre-
vailing party before the agency. The FPA limits judicial
review to those parties who have been “aggrieved by an order
issued by the Commission.” 16 U.S.C. § 825l(b). In addition,
“[l]ike all parties seeking access to the federal courts, [Puget
is] held to the constitutional requirement of standing.” Shell
Oil Co. v. FERC, 47 F.3d 1186, 1200 (D.C. Cir. 1995). The
D.C. Circuit has held that both aggrievement and standing
require “that petitioners establish, at a minimum, ‘injury in
fact’ to a protected interest.” Id. (interpreting the similar
aggrievement requirement of 28 U.S.C. § 2344).

   [4] “[M]ere disagreement with an agency’s rationale for a
substantively favorable decision, even where such disagree-
ment focuses on an interpretation of law to which a party
objects, does not constitute the sort of injury necessary for
purposes of Article III standing . . . .” Id. at 1202 (internal
quotation marks omitted). The general rule is that a party may
not appeal from a decree in its favor. Lindheimer v. Illinois
Bell Tel. Co., 292 U.S. 151, 176 (1934). There are, however,
exceptions to the general rule, one of which we find applica-
ble here. This is the exception for cross-appellants who
“might become aggrieved upon reversal on the direct appeal.”
Hilton v. Mumaw, 522 F.2d 588, 603 (9th Cir. 1975). In such
a case, “the risk that [a cross-appellant] might become
aggrieved upon reversal on the direct appeal is sufficient” to
confer standing, even when “the final order from which the
direct appeal was taken was entirely favorable to cross-
appellants.” Id.
                   PORT OF SEATTLE v. FERC                10421
   [5] Puget undoubtedly prevailed before the agency; indeed,
it argues that FERC reached the correct result in not granting
refunds. Puget has standing, however, because, while not
technically bringing a cross-appeal, it essentially finds itself
in the position of a cross-appellant who lost a collateral issue
below but ultimately prevailed. With the Refund Proponents
appealing FERC’s denial of refunds, FERC’s collateral
refusal to let Puget withdraw its complaint would expose
Puget to greater refund liability should we reverse. Accord-
ingly, under Hilton, the risk that Puget “might become
aggrieved upon reversal” allows it to bring this appeal.

                               B

   Although it has standing to raise them, Puget’s procedural
arguments are unavailing. On June 19, 2001, FERC extended
price mitigation beyond California to the rest of the western
states, including the Pacific Northwest. June 19, 2001 Order,
95 FERC ¶ 61,418 at 62,568. The June 19, 2001 Order also
required public utility sellers and buyers to engage in settle-
ment discussions to determine the amount of refunds owed.
Id. at 62,570. Three days later, on June 22, 2001, FERC clari-
fied that the settlement discussions should not be limited to
California entities but “may also focus on settling past
accounts related to sales in the Pacific Northwest.” June 22,
2001 Order, 95 FERC ¶ 61,425 at 62,583. On the same day,
Puget filed a motion to dismiss its complaint and notice of
withdrawal.

   Puget contends that its notice of withdrawal of the com-
plaint upon which the Pacific Northwest refund proceeding is
based became effective as a matter of law fifteen days after
Puget filed the notice, nullifying the entire refund proceeding
at issue in this case. Puget’s argument is that although some
Refund Proponents filed motions in opposition to Puget’s
notice, these motions in opposition could not have prevented
Puget’s withdrawal from going into effect because the Refund
Proponents were not, at that time, parties to the proceeding.
10422                 PORT OF SEATTLE v. FERC
Because we must defer to FERC’s interpretation of its own
regulation “so long as [the interpretation] is not plainly erro-
neous or inconsistent with the regulation,” Entergy Servs.,
Inc. v. FERC, 375 F.3d 1204, 1209 (D.C. Cir. 2004) (internal
quotation marks omitted), we disagree.

   FERC’s regulations provide that a withdrawal “of any
pleading is effective at the end of 15 days from the date of fil-
ing . . . if no motion in opposition to the notice of withdrawal
is filed within that period and the decisional authority does
not issue an order disallowing the withdrawal within that peri-
od.” 18 C.F.R. § 385.216(b)(1). If, on the other hand, “a
motion in opposition to a notice of withdrawal is filed within
the 15 day period, the withdrawal is not effective until the
decisional authority issues an order accepting the withdraw-
al.” Id. § 385.216(b)(2). Puget contends that although the
Refund Proponents opposed Puget’s notice, this opposition
was not effective because another regulation states that
motions may be filed only by “a participant or a person who
has filed a timely motion to intervene which has not been
denied.”1 Id. § 385.212(a)(2). The regulations in turn define
“participant” as “any party” or any employee of the Commis-
sion. Id. § 385.102(b). A “party” is one who has filed the
complaint, is a respondent to the proceeding, or who has
effectively intervened. Id. § 385.102(c). The process of inter-
vening, not particularly relevant here, is laid out at 18 C.F.R.
§ 385.214.

  FERC has interpreted 18 C.F.R. § 385.216(b)(1) as placing
no limitation on who may oppose a party’s notice of with-
drawal. June 25, 2003 Order, 103 FERC ¶ 61,348 at 62,365
  1
    Although the language permitting “a person who has filed a timely
motion to intervene which has not been denied,” 18 C.F.R.
§ 385.212(a)(2) (emphasis added), might apply to someone not yet offi-
cially a “participant” or “party,” none of the Refund Proponents would fall
into this category because their motions to intervene were filed out of
time.
                      PORT OF SEATTLE v. FERC                     10423
n.19. In the alternative, FERC also interpreted the regulations
as permitting a non-party to oppose the withdrawal of a com-
plaint by simultaneously filing a motion in opposition to with-
drawal as well as a motion to intervene. Id.; November 10,
2003 Order, 105 FERC ¶ 61,183 at 61,958-59. In that situa-
tion, according to FERC, even if FERC did not grant the
motion to intervene until a later date, it could have granted the
motion to intervene on the day both motions were filed, thus
making the non-party an intervening party capable of filing a
motion in opposition under 18 C.F.R. § 385.212(a)(2). June
25, 2003 Order, 103 FERC ¶ 61,348 at 62,365 n.19; Novem-
ber 10, 2003 Order, 105 FERC ¶ 61,183 at 61,958-59.
Accordingly, because the Attorney General of Washington
and the City of Seattle filed, on July 9, 2001, simultaneous
motions to intervene and motions in opposition to the with-
drawal, November 10, 2003 Order, 105 FERC ¶ 61,183 at
61,958 n.13, FERC rejected Puget’s argument that its com-
plaint had been withdrawn as a matter of law fifteen days
after Puget filed its notice of withdrawal, id. at 61,958-59.2

   [6] We see no error in FERC’s interpretation of its own
regulations. The regulation addressing notices of withdrawal
does not explicitly state that opposition to such notices may
be made only by formal parties to the proceeding. 18 C.F.R.
§ 385.216(b)(1). FERC did not err in treating the Attorney
General of Washington and the City of Seattle as intervenors
for purposes of opposing Puget’s notice of withdrawal. We
also find support for FERC’s decision in the fact that FERC
granted the City of Tacoma and the Port of Seattle party status
in the California refund proceeding on July 9, 2001. See Dom-
tar Maine Corp. v. FERC, 347 F.3d 304, 309 (D.C. Cir. 2003)
(permitting retroactive grant of intervention). Given the
  2
    The City of Tacoma and the Port of Seattle did not file their motions
to intervene in the Pacific Northwest proceeding until July 26, 2001,
nearly three weeks after filing their motions in opposition to the with-
drawal. They had, however, intervened in the California refund proceeding
at the time they opposed Puget’s notice of withdrawal.
10424                  PORT OF SEATTLE v. FERC
extremely close ties between the California proceeding and
the Pacific Northwest proceeding, and FERC’s frequent treat-
ment of the two refund proceedings as one and the same, see,
e.g., June 22, 2001 Order, 95 FERC ¶ 61,425 at 62,583 (using
the SDG & E heading and clarifying that “all parties to the
SDG&E complaint proceeding . . . may also focus on settling
past accounts related to sales in the Pacific Northwest”),
FERC could also have accepted the opposition motions of
Tacoma and the Port of Seattle as filed by parties to the pro-
ceeding. For these reasons, we hold that the withdrawal of
Puget’s complaint did not become effective as a matter of
law, and FERC may use the complaint as a basis for awarding
refunds in the Pacific Northwest.

                                     C

   The Refund Opponents supporting Puget further argue the
Pacific Northwest proceeding was procedurally doomed
because Puget’s complaint did not request a required “refund
effective date,” thus stripping FERC of any authority to order
refunds for electricity purchases in the Pacific Northwest. We
reject this argument as well.

    Congress has provided that “[w]henever [FERC] institutes
a proceeding under this section, [FERC] shall establish a
refund effective date.” 16 U.S.C. § 824e(b) (2004). This
refund effective date may not be earlier than sixty days after
the filing of a complaint or the filing of a notice by FERC that
it intends to investigate rates sua sponte.3 Id. The refund effec-
tive date is important because any refunds ordered by FERC
are limited to the fifteen-month period following the refund
effective date. Id. Without a refund effective date, the entire
Pacific Northwest proceeding would have been moot because
  3
   Amendments effective August 8, 2005, removed the sixty-day waiting
period, permitting the refund effective date to be set as early as the date
the complaint is filed or the date the Commission files notice of its investi-
gation. 16 U.S.C. § 824e(b) (2006).
                    PORT OF SEATTLE v. FERC                10425
FERC would have been powerless to order refunds for the
period sought by the Refund Proponents.

   [7] The Refund Opponents argue that Puget’s complaint
never requested refunds or the setting of a refund effective
date. To the contrary, Puget’s complaint clearly stated that
“[Puget] requests that any refunds ordered by the Commission
reflect the prospective nature of the relief sought. If and to the
extent any refund is called for in response to [Puget’s] peti-
tion, [Puget] respectfully requests that the refund effective
date be set . . . sixty (60) days after the date of filing of this
Complaint.”

   In the alternative, the Refund Opponents argue that because
FERC dismissed Puget’s complaint on December 15, 2000,
December 15, 2000 Order, 93 FERC ¶ 61,294 at 62,019-20,
FERC prevented the establishment of a refund effective date
even though Puget filed a petition for rehearing on January
12, 2001. In other words, they argue that buyers and sellers
in the Pacific Northwest spot market could not have been on
notice that December 25, 2000, may serve as the effective
date for refunds because the complaint requesting that date
was dismissed prior to December 25, 2000. This argument
fails for two reasons. First, market participants in the Pacific
Northwest were notified prior to FERC’s dismissal of the
complaint that Puget had requested a refund effective date of
December 25, 2000. FERC itself created a “Notice of Com-
plaint,” which stated that Puget’s complaint “seeks a refund
effective date, to the extent any refund is called for, of sixty
days after the filing of the Complaint.” FERC’s notice also
explained that “[c]opies of this filing were served upon parties
to the WSPP, and transmitted electronically to the WSPP for
posting on its website (www.wspp.org) and for electronic dis-
tribution to all parties to the WSPP Agreement.” In addition,
this notice was published in the Federal Register on Novem-
ber 8, 2000. 65 Fed. Reg. 66,986.

  Second, the FPA does not support the contention of the
Refund Opponents. On the one hand, the FPA provides that
10426               PORT OF SEATTLE v. FERC
if FERC does not respond to an application for rehearing
within thirty days after filing, the application “may be deemed
to have been denied.” 16 U.S.C. § 825l(a) (emphasis added).
FERC’s regulations make this denial automatic, stating that
“[u]nless [FERC] acts upon a request for rehearing within 30
days after the request is filed, the request is denied.” 18
C.F.R. § 385.713(f). On the other hand, the statute also states
that until the record is filed with the court of appeals, FERC
may at any time, with reasonable notice, modify or set aside
any finding or order it has made. 16 U.S.C. § 825l(a). Thus,
even if Puget’s rehearing request was denied as a matter of
law thirty days after it was filed, this denial did not strip
FERC of its ability to change its mind and modify its decision
in the June 25, 2003 Order.

   Moreover, we have already explained that petitions for
rehearing keep market participants on notice that an alterna-
tive refund effective date, once rejected by FERC, might in
the future be made the refund effective date. Pub. Utils.
Comm’n, 462 F.3d at 1047 (“Further, some of the California
Parties promptly sought rehearing of FERC’s initial determi-
nation of the refund effective date in its August 23, 2000
Order. In short, market participants were quickly apprised that
the original refund effective date might be subject to revi-
sion.”). Here, Puget filed a petition for rehearing challenging
FERC’s order dismissing its complaint. Thus, sellers in the
Pacific Northwest — who were already on notice of Puget’s
complaint requesting a refund effective date — were suffi-
ciently on notice that Puget’s complaint and its attendant
refund effective date were still potentially viable because
Puget filed a petition for rehearing. Any reliance by sellers on
the lack of a refund effective date “ ‘prior to the issuance of
a final order was at their own risk.’ ” Id. (quoting December
19, 2001 Order, 97 FERC ¶ 61,275 at 62,198).

  [8] Finally, the Refund Opponents argue that FERC was
required to set a refund effective date, if at all, before institut-
ing a § 206 refund proceeding. FERC acknowledges in its
                   PORT OF SEATTLE v. FERC                 10427
brief that “[t]he Commission never established an FPA
§ 206(b) refund effective date for this matter . . . .” However,
the plain language of the FPA does not place any restriction
on when FERC may set the refund effective date. Hertzberg
v. Dignity Partners, Inc., 191 F.3d 1076, 1081 (9th Cir. 1999)
(“Where the meaning of a statute is clear from the text, we
need look no further.”). Rather, the statute states that
“[w]henever the Commission institutes a proceeding under
this section, the Commission shall establish a refund effective
date.” 16 U.S.C. § 824e(b). The statute mandates the estab-
lishment of an effective date, but it does not mandate when
FERC must establish it. To the extent the word “institutes” is
ambiguous, connoting both that the date shall be established
at the time the proceeding begins and that the date shall be
established anytime FERC is involved in such a proceeding,
we owe deference to FERC’s interpretation of the ambiguous
language. Chevron, 467 U.S. at 842-43. FERC made clear its
interpretation when it announced that the statute would permit
FERC to set the refund effective date at December 25, 2000.
June 25, 2003 Order, 103 FERC ¶ 61,348 at 62,366 n.25.

   FERC’s interpretation, which would permit it to set the
refund effective date at any time, is consistent with the overall
framework of the statute, which indicates the primary concern
of Congress was to afford notice to market participants of the
period of time during which they may be liable for refunds.
The sixty-day rule provides notice to the market that if FERC
ever decides to order refunds based on a given complaint,
those refunds could cover a period beginning sixty days after
the filing of that complaint, and no earlier. This is a permissi-
ble construction of the statute, and is supported by our prior
decision regarding the California proceeding, in which we
found that the “key question is whether the SDG & E com-
plaint afforded sufficient notice to alert market participants
that sales and purchases might be subject to refund.” Pub.
Utils. Comm’n, 462 F.3d at 1046. That opinion made clear
that FERC has some discretion in setting “ ‘the earliest refund
effective date allowed in order to give maximum protection to
10428              PORT OF SEATTLE v. FERC
consumers,’ ” id. (quoting December 19, 2001 Order, 97
FERC ¶ 61,275 at 62,198), as long as that protection is bal-
anced against fairness to market participants by providing
them with the notice necessary to change their practices prior
to the date refunds might start to accrue.

   [9] In sum, we reject the procedural challenges raised by
the Refund Opponents and hold that Puget’s complaint
requested a refund effective date, FERC’s dismissal of
Puget’s complaint did not disturb FERC’s ability to set the
refund effective date, and FERC was not required to formally
set the refund effective date prior to instituting a § 206 refund
proceeding. We also hold that Puget’s complaint was not
withdrawn as a matter of law because the Refund Proponents
timely opposed Puget’s notice of withdrawal. Accordingly,
FERC had the authority to order refunds for transactions in
the Pacific Northwest spot market during the permissible time
period, although it declined to do so on the merits.

                               IV

   The California Parties challenge FERC’s decision to
exclude from the Pacific Northwest refund proceeding pur-
chases of energy made by the California Energy Resources
Scheduling (“CERS”) division in the Pacific Northwest spot
market. CERS, a division of the California Department of
Water Resources, began purchasing wholesale power on
behalf of California consumers in the California and Pacific
Northwest spot markets during the energy crisis. See Pub.
Utils. Comm’n, 462 F.3d at 1042. FERC ruled that the CERS
transactions were outside the scope of the Pacific Northwest
refund proceeding because the Puget complaint, on which the
proceeding was based, focused on sales of energy “into” the
Pacific Northwest, whereas purchases made by CERS were
actually purchases “into” California, where the energy was
consumed. November 10, 2003 Order, 105 FERC ¶ 61,183 at
61,964 n.43. In addition, FERC adopted the ALJ’s finding
that the CERS deliveries of energy took place in California,
                   PORT OF SEATTLE v. FERC                 10429
not in the Pacific Northwest. Id. FERC reaffirmed this deci-
sion when it denied the California Parties’ request for rehear-
ing. February 9, 2004 Order, 106 FERC ¶ 61,109 at 61,368
(“Clearly, Puget’s complaint focus was on transactions into
the Pacific Northwest, and as the ALJ explained, the bilateral
transactions involving CERS were sales into California and
not into the Pacific Northwest.”). The February 9, 2004 Order
also claimed that the ALJ had found that a witness for CERS
testified that deliveries actually occurred in California, not in
the Pacific Northwest. Id.

   [10] We cannot accept such a constrained reading of the
Puget complaint. First, FERC’s factual finding that the energy
purchased by CERS was delivered in California is not sup-
ported by substantial evidence. The ALJ never explicitly
found that a CERS witness admitted that the energy deliveries
took place in California. The section in which the ALJ dis-
cusses the CERS witness is actually a recitation of arguments
made by the Refund Opponents. September 24, 2001 ALJ
Report, 96 FERC ¶ 63,044 at 65,312. By contrast, the ALJ’s
recommendations focus solely on the scope of the Puget com-
plaint. Id. at 65,331. The ALJ’s proposed findings of fact state
that deliveries took place in California without mentioning the
CERS witness and without clarifying the basis for this pro-
posed finding. Id. at 65,385-86 (Proposed Findings of Fact 2
and 28). FERC, on the other hand, cites to pages in the tran-
script of the ALJ evidentiary proceeding where a CERS
employee confirmed that physical delivery is taken within the
control area of the Los Angeles Department of Water and
Power. The record shows, however, that even if physical
delivery of the energy took place in California, the legal
change of ownership of the energy occurred, pursuant to the
Confirmation Agreement, at interconnections located within
the Pacific Northwest. There is no evidence in the record sug-
gesting that the change of ownership occurred in California,
rather than in the Pacific Northwest.

   Furthermore, FERC’s attempt to distinguish between the
location where a change of ownership of electricity occurs
10430              PORT OF SEATTLE v. FERC
and the location where that electricity physically changes
hands is not supported by either the law or the governing con-
tractual agreements between CERS and energy sellers in the
Pacific Northwest.

   Having established that FERC could not have found, on
this record, that the CERS purchases occurred in California,
we must determine whether sales to CERS were outside the
scope of the Pacific Northwest refund proceeding even if the
legal change of ownership occurred in the Pacific Northwest.
In so doing, we are mindful that we owe deference to FERC’s
interpretation of the scope of Puget’s complaint. Amerada
Hess Pipeline Corp. v. FERC, 117 F.3d 596, 604 (D.C. Cir.
1997); Burlington N. R.R. Co. v. ICC, 985 F.2d 589, 595
(D.C. Cir. 1993).

   [11] We conclude that FERC’s interpretation of the scope
of Puget’s complaint is arbitrary, capricious, and an abuse of
discretion. On its face, Puget’s complaint provides no indica-
tion of an intent to exclude refunds for energy purchased in
the Pacific Northwest spot market for consumption outside
the geographical area. The complaint petitioned FERC to cap
prices at which sellers subject to FERC’s jurisdiction “may
sell capacity or energy into the Pacific Northwest’s wholesale
power markets. [Puget] seeks an order that prospectively caps
the prices for wholesale sales of energy or capacity into the
Pacific Northwest . . . .” This language indicates that the com-
plaint was concerned with (1) sellers who were (2) selling
energy in the Pacific Northwest market. The complaint is
silent as to any constraint on the identity of the buyers or
where the energy ultimately would be consumed.

   FERC’s interpretation of Puget’s complaint is also incon-
sistent with its prior interpretation of the complaint filed by
SDG & E in the California proceeding. That complaint simi-
larly petitioned FERC “for an emergency order capping . . .
the prices at which sellers subject to its jurisdiction may bid
energy or ancillary services into California’s two large bulk-
                  PORT OF SEATTLE v. FERC               10431
power markets . . . .” (Emphasis added.) In contrast to its
interpretation of the Puget complaint, FERC did not interpret
the California complaint as limiting refunds to entities that
purchased energy for ultimate consumption in California, and
in fact some parties who benefitted from refunds in the Cali-
fornia proceeding did not consume the fruits of their pur-
chases in California. FERC’s interpretation of the California
complaint is the better one, and one upon which we relied,
and its conflicting interpretation of a similar complaint in a
similar refund proceeding renders its subsequent interpreta-
tion unworthy of deference. Koch Gateway Pipeline Co. v.
FERC, 136 F.3d 810, 815-16 (D.C. Cir. 1998) (“[W]here an
agency treats similar situations differently without reasoned
explanation, its decision will be vacated as arbitrary and
capricious.”). Both complaints served to notify all sellers of
energy in the respective markets that they may be liable for
refunds for sales of energy in those markets, regardless of
where the energy would be consumed.

   In addition, FERC argued in the SDG & E case that the
CERS transactions were the subject of other regulatory pro-
ceedings. Pub. Utils. Comm’n, 462 F.3d at 1064. Other enti-
ties pointed to the Pacific Northwest proceeding to argue that
the CERS transactions were outside the scope of the Califor-
nia proceeding. We accepted these arguments and excluded
the CERS transactions from that case. Id. at 1063-64. It would
be inconsistent with our reasoning to exclude the transactions
from the California proceeding based in substantial part on
the existence of this proceeding involving the Pacific North-
west market, and then to exclude the transactions from this
proceeding based on the argument that the transactions were
conducted in the California market.

   [12] We therefore conclude that FERC must, on remand,
include the CERS transactions when it determines whether
refunds are warranted for sales in the Pacific Northwest spot
market.
10432             PORT OF SEATTLE v. FERC
                              V

   Finally, we must determine whether FERC was required to
take into account evidence of market manipulation filed by
the parties after the ALJ hearing. FERC permitted the Refund
Proponents to submit new evidence of market manipulation
that emerged after the ALJ’s evidentiary proceeding. Decem-
ber 19, 2002 Order, 101 FERC ¶ 61,304 at 62,221 (“We will
allow the movants and other parties in this proceeding to con-
duct additional discovery for the period January 1, 2000 to
June 20, 2001.”). The Refund Proponents argued that new
evidence had emerged as a result of various investigations
into the practices of Enron. Id. at 62,219. See Lockyer, 383
F.3d at 1015 (explaining many of Enron’s manipulative tac-
tics). Despite a great deal of new evidence submitted to FERC
in the spring of 2003, however, FERC failed to take any of it
into account, relying instead on the ALJ’s factual findings
from September 2001, which were made prior to the Enron
revelations. See June 25, 2003 Order, 103 FERC ¶ 61,348 at
62,366-70. Regarding the new evidence, FERC’s subsequent
order denying rehearing stated merely: “In reaching its deci-
sion to terminate the proceeding, the Commission considered
the complete record, including the material submitted in the
March 2003 filings.” November 10, 2003 Order, 105 FERC
¶ 61,183 at 61,960.

   [13] In order for an agency to avoid making an arbitrary
and capricious determination, it must “examine the relevant
data and articulate a satisfactory explanation for its action
including a ‘rational connection between the facts found and
the choice made.’ ” Motor Vehicle Mfrs. Ass’n of U.S. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting
Burlington Truck Lines, Inc. v. United States, 371 U.S. 156,
168 (1962)). An agency’s ruling will be deemed arbitrary and
capricious where the agency “entirely failed to consider an
important aspect of the problem [or] offered an explanation
for its decision that runs counter to the evidence before the
agency.” Id. See also La. Pub. Serv. Comm’n v. FERC, 184
                    PORT OF SEATTLE v. FERC                10433
F.3d 892, 898 (D.C. Cir. 1999) (requiring FERC to examine
submitted data); Laclede Gas Co. v. FERC, 997 F.2d 936, 948
(D.C. Cir. 1993) (requiring FERC to provide adequate expla-
nation). Moreover, an agency must account for evidence in
the record that may dispute the agency’s findings. Universal
Camera Corp. v. Nat’l Labor Relations Bd., 340 U.S. 474,
488 (1951) (“The substantiality of evidence must take into
account whatever in the record fairly detracts from its
weight.”).

   [14] Given these requirements, FERC’s failure to consider
or examine the new evidence showing intentional market
manipulation in California and its potential ties to the Pacific
Northwest was arbitrary and capricious. The Refund Propo-
nents argue that the new evidence suggests, among other
things, that: sellers of electricity in the Pacific Northwest were
involved in schemes to withhold energy and to assist Enron
in creating false congestion; Enron used markets outside of
California in order to advance its tactics in California; Enron
may have implemented fraudulent schemes outside California
markets; and utilities in the Pacific Northwest violated posting
requirements in transactions with Enron. Even assuming all of
these transactions occurred in the California spot market, the
fact that Pacific Northwest sellers were apparently involved in
Enron’s manipulation indicates that FERC must at least con-
sider the possibility that the Pacific Northwest spot market
was not, as the ALJ found, functional and competitive. June
25, 2003 Order, 103 FERC ¶ 61,348 at 62,366-67. FERC’s
findings, based on the record established by the ALJ in 2001,
“that other factors related to supply and demand fundamentals
contributed to the dramatic prices in the region,” id. at 62,367,
and that “no evidence of such ‘lawlessness’ has been shown
with regard to any specific transaction in the Pacific North-
west spot market,” November 10, 2003 Order, 105 FERC
¶ 61,183 at 61,966, must be reevaluated in light of this evi-
dence.

  [15] Moreover, we reject the contention by the Refund
Opponents that FERC need not consider the new evidence
10434              PORT OF SEATTLE v. FERC
because FERC already is addressing market manipulation in
separate proceedings focusing on misconduct. Not only did
FERC fail to rely on this reasoning below, see Laclede Gas
Co., 997 F.2d at 945 (FERC order “must stand or fall on the
grounds articulated by the agency in that order”) (internal
quotation marks omitted), but we have already held that
FERC’s prosecutorial investigations cannot justify the denial
of relief in contested adjudications before the Commission,
Pub. Utils. Comm’n, 462 F.3d at 1048-51. Accordingly, we
remand to permit FERC to examine this new evidence of mar-
ket manipulation in detail and account for it in any future
orders regarding the award or denial of refunds in the Pacific
Northwest proceeding. FERC may also find it necessary to
call for additional fact-finding if the record evidence of mar-
ket manipulation is not sufficient to enable FERC to make a
reasoned decision. In view of this remand, we offer no opin-
ion on FERC’s findings based on the record established by the
ALJ.

                               VI

   At this juncture we find it preferable to reserve judgment
on other issues raised by the parties. As such, we decline to
reach the merits of FERC’s ultimate decision to deny refunds
but urge the Commission to further consider its decision, on
remand, in light of the related decisions of this court that fol-
lowed FERC’s final orders in the Pacific Northwest proceed-
ing.

 PETITION GRANTED IN PART; DENIED IN PART;
REMANDED. Each party shall pay its own costs on appeal.

McKEOWN, Circuit Judge, concurring:

   I concur in the opinion and the result, with the exception of
the question of whether Puget Sound Energy is an “aggrieved
                  PORT OF SEATTLE v. FERC               10435
party.” Puget lacks standing because it was granted all the
relief it sought (i.e., FERC granted price mitigation in the
Pacific Northwest proceeding), and thus Puget is not “ag-
grieved” within the meaning of 16 U.S.C. § 825l(b). On this
point, I agree with FERC’s position. A party seeking appeal
must establish, at a minimum, “injury in fact” to a protected
interest. Shell Oil Co. v. FERC, 47 F.3d 1186, 1200 (D.C. Cir.
1995). Puget has not done so.