Court Opinion

ID: 9915128
Source: CourtListenerOpinion
Date Created: 2024-01-04 18:00:46.543913+00
Date Added: 2024-06-11T13:17:17.362669
License: Public Domain

PRECEDENTIAL

    UNITED STATES COURT OF APPEALS
         FOR THE THIRD CIRCUIT

       Nos. 21-3068, 21-3205 & 21-3243
                ____________

     PJM POWER PROVIDERS GROUP,

                           Petitioner in No. 21-3068

                     v.

FEDERAL ENERGY REGULATORY COMMISSION

       ___________________________

 ELECTRICAL POWER SUPPLY ASSOCIATION,

                          Petitioner in No. 21-3205

                     v.

FEDERAL ENERGY REGULATORY COMMISSION

       ___________________________
  PENNSYLVANIA PUBLIC UTILITY COMMISSION;
    PUBLIC UTILITIES COMMISSION OF OHIO,

                                   Petitioner in No. 21-3243

                              v.

  FEDERAL ENERGY REGULATORY COMMISSION

         On Petition for Review of an Order of the
         Federal Energy Regulatory Commission
              (FERC No. ER21-2582-000)

                Argued on January 10, 2023

   Before: JORDAN, PHIPPS and ROTH, Circuit Judges

             (Opinion filed: December 1, 2023)

Elbert Lin
Charles D. Wallace, III
Hunton Andrews Kurth
951 East Byrd Street
Riverfront Plaza East Tower
Richmond, VA 23219

John L. Shepherd, Jr.    (ARGUED)
Hunton Andrews Kurth
2200 Pennsylvania Avenue, NW
Washington, DC 20037

             Counsel for Petitioner PJM Power Providers
             Group

                              2
Paul W. Hughes
McDermott Will & Emery
500 N Capitol Street, NW
Washington, DC 20001

             Counsel for Petitioner Electric Power Supply
             Association

Kriss E. Brown             (ARGUED)
Christian A. McDewell
Pennsylvania Public Utility Commission
Commonwealth Keystone Building
400 N Street
PO Box 3265
Harrisburg, PA 17120

             Counsel for Petitioner Pennsylvania Public
             Utility Commission

Thomas G. Lindgren
Werner L. Margard, III
Office of Attorney General of Ohio
30 East Broad Street
26th Floor
Columbus, OH 43215

             Counsel for Petitioner Public Utilities
             Commission of Ohio

                              3
Jeffrey W. Mayes
Monitoring Analytics
2621 Van Buren Avenue
Suite 160
Eagleville, PA 19403

             Counsel for Intervenor Petitioner Monitoring
             Analytics LLC

Denise C. Goulet          (ARGUED)
McCarter & English
1301 K Street, NW
Suite 1000 West
Washington, DC 20005

             Counsel for Intervenor Petitioner Office of the
             Consumer Counsel State of Ohio OCC

Jared B. Fish             (ARGUED)
Federal Energy Regulatory Commission
888 First Street NE
Washington, DC 20426

             Counsel for Respondent

Danielle C. Fidler
Earthjustice Legal Defense Fund
1001 G Street, NW
Suite 1000
Washington, DC 20001

             Counsel for Intervenor Respondents Union of
             Concerned Scientists and Sierra Club

                             4
Peter Hopkins
Amber L. Martin Stone
Jeffrey A. Schwartz
Scott H. Strauss         (ARGUED)
Cynthia Bogorad
Lauren L. Springett
Spiegel & McDiarmid
1875 Eye Street, NW
Suite 700
Washington, DC 20006

            Counsel for Intervenor Respondents Delaware
            Division of Public Advocate; Maryland Office
            of Peoples Counsel; New Jersey Division of
            Rate Counsel and Office of Peoples Counsel for
            the District of Columbia

Matthew Price          (ARGUED)
Jenner & Block
1099 New York Avenue, NW
Suite 900
Washington, DC 20001

            Counsel for Intervenor Respondents
            Constellation Energy Corp and Constellation
            Energy Generation LLC

                           5
Miles H. Mitchell
Maryland Public Service Commission
6 St. Paul Street
6 St. Paul Centre, 16th Floor
Baltimore, MD 21202

             Counsel for Intervenor Respondent Maryland
             Public Service Commission

David C. Apy
Office of Attorney General of New Jersey
Division of Law
25 Market Street
Hughes Justice Complex
Trenton, NJ 08625

             Counsel for Intervenor Respondent New Jersey
             Board of Public Utilities

Robert A. Weishaar, Jr.
McNees Wallace & Nurick
1200 G Street, NW
Suite 800
Washington, DC 20005

             Counsel for Intervenor Respondent PJM
             Industrial Customer Coalition

                             6
Ryan J. Collins
Paul M. Flynn
Wright & Talisman
1200 G Street, NW
Suite 600
Washington, DC 20005

            Counsel for Intervenor respondent PJM
            Interconnection LLC

Caroline Reiser
Natural Resources Defense Council
1152 15th Street, NW
Site 300
Washington, DC 20005

            Counsel for Intervenor Respondent Natural
            Resource Defense Council

Casey Roberts
Sierra Club
1536 Wynkoop Street
Suite 200
Denver, CO 80202

Megan C. Wachspress
Sierra Club Environmental law Program
2101 Webster Street
13th Floor
Oakland, CA 94612

            Counsel for Intervenor Respondent Sierra Club

                            7
Sarah A. Hunger
Office of Attorney General of Illinois
100 West Randolph Street
12th Floor
Chicago, IL 60601

              Counsel for Intervenor Respondents Illinois
              Commerce Commission and People of the State
              of Illinois

Cynthia Bogorad
Lauren L. Springett
Spiegel & McDiarmid
1875 Eye Street NW
Suite 700
Washington, DC 20006

              Counsel for Intervenor Respondent Buckeye
              Power, Inc.

Adrienne E. Clair
Thompson Coburn
1909 K Street, NW
Suite 600
Washington, DC 2006

              Counsel for Intervenor Respondent Old
              Dominion Electric Cooperative; National Rural
              Electric Cooperative Association

                              8
Daniel E. Frank
Allison Speaker
Eversheds Sutherland
700 Sixth Street, NW
Suite 700
Washington, DC 20001

            Counsel for Intervenor Respondent East
            Kentucky Power Cooperative Inc.

Andrew D. Cordo
Shannon E. German
Wilson Sonsini Goodrich & Rosati
222 Delaware Avenue
Suite 800
Wilmington, DE 19801

            Counsel for Intervenor Respondent Advanced
            Energy Economy

Gerit Hull
American Municipal Power
1111 Schrock Road
Suite 100
Columbus, OH 43229

            Counsel for Intervenor Respondent American
            Municipal Power Inc.

                           9
John E. McCaffrey, III
American Public Power Association
2451 Crystal Drive
Suite 1000
Arlington, VA 22202

              Counsel for Intervenor Respondent American
              Public Power Association

Anthony J. Corino
PSEG Corporation
80 Park Plaza
Newark, NJ 07102

              Counsel for Intervenor Respondents PSEG;
              PSEG Power LLC and PSEG ER&T

Donald R. Goodson
Institute for Policy Integrity
139 MacDougal Street
Third Floor
New York, NY 10012

              Counsel for Amicus Appellee Institute for
              Policy Integrity at New York University School
              of Law

                                 10
Christopher R. Nestor
Overstreet & Nestor
461 Cochran Road
P.O. Box 237
Pittsburgh, PA 15228

             Counsel for Amicus Petitioner Pennsylvania
             Senate Republican Caucus

Michael E. Rowan
Office of Attorney General of Maryland
Higher Education Div.
200 St Paul Place
20th Floor
Baltimore, MD 21202

             Counsel for Amicus Respondents District of
             Columbia, State of Delaware and State of
             Maryland

Ari Peskoe
Harvard Electricity Law Initiative
6 Everett Street
Suite 4119
Cambridge, MA 02138

             Counsel for Amicus Respondent Electricity
             Regulation Scholars

                              11
                         O P I N I ON

ROTH, Circuit Judge:

       This consolidated action represents the latest salvo in a
years-long battle over whether, and to what extent, state-
subsidized energy resources should be subject to price
mitigation in interstate capacity auctions. The focal point of
the dispute is a tariff filed by PJM Interconnection, L.L.C.
(PJM), which took effect by operation of law in 2021. 1

        Three separate petitions now ask us to exercise, for the
first time, our authority to review this “action by inaction”
pursuant to Section 205(g) of the Federal Power Act (FPA), 2 a
2018 provision expressly articulating the right to review under
these circumstances. PJM Power Providers Group (P3) and
Electric Power Supply Association (EPSA) (collectively,
Generators), two nonprofit associations representing energy
generators, filed separate petitions.       Pennsylvania Public
Utility Commission and Public Utilities Commission of Ohio
(State Entities) jointly filed the third. 3

1
  16 U.S.C. § 824d(g).
2
  Id. §§ 791 et seq.
3
  More than two dozen intervenors and amici also filed briefs.
Intervenor Petitioners include: Monitoring Analytics LLC and
the Ohio Office of the Consumers Counsel. Amicus for
Petitioners is the Pennsylvania Senate Republican Caucus.
Intervenor Respondents include:        Union of Concerned
Scientists, Delaware Division of the Public Advocate,

                              12
       The Petitioners, Federal Energy Regulatory
Commission (FERC), and numerous intervenors and amici
dispute the proper scope of our review pursuant to § 205(g).
We hold that our review of FERC “action,” whether actual or
constructive, proceeds under the same deferential standards set
forth in the FPA and Administrative Procedure Act. 4
Consistent with Congress’s directive in § 205(g), we further
hold that our review properly encompasses the
Commissioners’ mandatory statements setting forth their
reasons for approving or denying the filing.

       Reviewing the petitions accordingly, we will deny all
three because FERC’s acceptance of PJM’s tariff was not

Maryland Office of Peoples Counsel, Maryland Public Service
Commission, New Jersey Board of Public Utilities, New Jersey
Division of Rate Counsel, Natural Resources Defense Council,
Natural Rural Electric Cooperative, Office of Peoples Counsel
for the District of Columbia, PJM Industrial Customer
Coalition, PJM Interconnection LLC, Sierra Club, Illinois
Commerce Commission, People of the State of Illinois,
Buckeye Power Inc., Old Dominion Electric Cooperative, East
Kentucky Power Cooperative Inc., Advanced Energy
Economy, American Municipal Power Inc., American Public
Power Association, PSEG, PSEG Power LLC, PSEG ER&T,
Constellation Energy Corp, Constellation Energy Generation
LLC, and Exelon Generation Co LLC. Amici on behalf of
FERC include: the Institute for Policy Integrity at New York
University School of Law, the District of Columbia, the State
of Delaware, the State of Maryland, and Electricity Regulation
Scholars.
4
  5 U.S.C. §§ 551 et seq.

                              13
arbitrary or capricious and was supported by substantial
evidence in the record.

I.     Background

       To frame the issues presented by the parties, we begin
by reviewing the key statutory provisions governing this
action, with a particular focus on § 205(g), the 2018
amendment to the FPA concerning judicial review of FERC
action by operation of law. We then turn to the factual and
procedural context for their claims.

       A.     The Federal Power Act and Judicial Review

        FERC is the independent agency to which Congress, in
the FPA, granted exclusive jurisdiction to ensure “rates
charged by public utilities for the transmission and sale of
energy in interstate commerce, and the ‘rules and regulations
affecting or pertaining to such rates’, [sic] are ‘just and
reasonable.’” 5 While the FPA empowers FERC to regulate
“all facilities for such transmission or sale of electric energy,”
it reserves jurisdiction over “facilities used for the generation
of electric energy” to state and local authorities. 6

5
  New Jersey Bd. of Pub. Utils. v. FERC, 744 F.3d 74, 79 (3d
Cir. 2014) (quoting 16 U.S.C. § 824d) (hereinafter NJBPU).
6
  NJBPU, 744 F.3d at 80 (quotations omitted) (quoting §
824(b)(1)); FERC v. Elec. Power Supply Ass’n, 577 U.S. 260,
264 (2016) (noting that the FPA “authorizes [FERC] to
regulate ‘the sale of electric energy at wholesale in interstate
commerce,’” but “leaves to the States alone, the regulation of
‘any other sale’ … of electricity”).

                               14
        Sections 205 and 206 of the FPA set forth the means by
which FERC may “fulfill its statutory charge of ensuring the
justness and reasonableness of rates.” 7 Together, they
comprise part of “a single statutory scheme under which all
rates are established initially by the [public utilities] . . . and all
rates are subject to being modified by the Commission upon a
finding that they are unlawful.” 8 Section 205 provides that
“public utilities may change their rates unilaterally, upon 60
days’ notice to FERC, which then reviews the changed rates to
ensure that they are ‘just and reasonable.’” 9 “It
is not necessary, in a filing pursuant to § 205, that FERC find
that the previous rate was unjust or unreasonable.” 10 Rather,
here FERC “plays ‘an essentially passive and reactive role.’” 11
Section 206, in contrast, provides that FERC may proactively
initiate rate changes, either on its own motion or in response to
a complaint, if the moving party demonstrates that the existing
rate is unjust and unreasonable and the proposed alternative is
just and reasonable. 12 Notably, § 206 does not “give[] FERC
the power to deny a utility the right to file changes” unilaterally
under § 205. 13

7
  Pub. Citizen, Inc. v. FERC, 839 F.3d 1165, 1167 (D.C. Cir.
2016).
8
  Atl. City Elec. Co. v. FERC, 295 F.3d 1, 10 (D.C. Cir. 2002)
(alteration in original) (quoting United Gas Pipe Line Co. v.
Mobile Gas Serv. Corp., 350 U.S. 332, 341 (1956)).
9
  NJBPU, 744 F.3d at 94; see 16 U.S.C. § 824d(d).
10
   NJBPU, 744 F.3d at 94 (citing Atl. City Elec. Co., 295 F.3d
at 9–10); see 16 U.S.C. § 824d(a)-(d).
11
   NJBPU, 744 F.3d at 94 (quoting Atl. City Elec. Co., 295 F.3d
at 9–10).
12
   16 U.S.C. § 824e(a).
13
   Atl. City Elec. Co., 295 F.3d at 10.

                                  15
        Our jurisdiction to review FERC orders arises under the
FPA and Administrative Procedure Act. 14 Specifically, the
FPA provides that a party aggrieved by a FERC order must first
seek rehearing by the Commission, which may grant or deny
rehearing, abrogate or modify its order without rehearing, or
constructively deny rehearing by failing to act within thirty
days. 15 Within sixty days of the Commission’s order on the
application for rehearing, an aggrieved party may seek review
of “order[s] issued by the Commission” in the courts of
appeals. 16 The FPA provides that we “shall have jurisdiction,
which upon the filing of the record with it shall be exclusive,
to affirm, modify, or set aside such order in whole or in part.” 17
Finally, the FPA makes clear that, absent orders to the contrary,
neither the filing of an application for rehearing before the
Commission nor the start of proceedings before the court of
appeals shall “operate as a stay of the Commission’s order.” 18

       The question of what constitutes a reviewable
Commission order is central to this dispute. FERC’s enabling
statute establishes that “[a]ctions of the Commission shall be
determined by a majority vote of the members present.” 19
While FERC comprises five commissioners, a quorum requires

14
   See 16 U.S.C. § 825l(b); 5 U.S.C. § 702 (waiving sovereign
immunity for claims for relief “other than money damages”);
28 U.S.C. § 1331.
15
   16 U.S.C. § 825l(a).
16
   Id. § 825l(b)
17
    Id. (“The finding of the Commission as to the facts, if
supported by substantial evidence, shall be conclusive.”).
18
   Id. § 825l(c).
19
   42 U.S.C. § 7171(e).

                                16
just three, making it possible for four commissioners to
deadlock two-to-two. 20 In Public Citizen, Inc. v. FERC, the
Court of Appeals for the D.C. Circuit considered whether
judicial review was available for a § 205 rate filing that took
effect after the four sitting Commissioners deadlocked and
failed to act within sixty days. 21 The court determined that it
lacked jurisdiction. 22 With regard to the FPA, the court held
that the secretarial notice issued by the Commission to
“describ[e] the effects of the deadlock are not reviewable
orders” 23 because “FERC did not engage in collective,
institutional action when it deadlocked.” 24 The court held that
it also lacked jurisdiction under the APA because that statute
only makes inaction reviewable “where the agency fails to take
a ‘discrete’ action it is legally required to take,” 25 and the FPA
does not “compel” FERC to act on a § 205 filing.26
Accordingly, the court held that it lacked jurisdiction to review
FERC inaction resulting in an order by operation of law. The
court concluded that “[a]ny unfairness associated with this
outcome inheres in the very text of the FPA. Accordingly, it
lies with Congress, not this Court, to provide the remedy.” 27

20
   Id. § 7171(b)(1), (e).
21
   839 F.3d at 1170.
22
   Id.
23
   Id. at 1172.
24
   Id. at 1170.
25
   Id. at 1172 (quoting Norton v. S. Utah Wilderness All., 542
U.S. 55, 62–63 (2004)).
26
   Id. at 1174 (explaining that the FPA does “not compel FERC
to either set the disputed rates for hearing or affirmatively
disapprove any unjust or unreasonable rates through the
Section 205 process”).
27
   Id.

                                17
        Congress did so in 2018. Rather than compelling FERC
to act on a § 205 filing, Congress added a provision to clarify
how agency inaction should be construed to permit judicial
review. The new provision, § 205(g), 28 stated that if FERC
“permits the 60-day period . . . to expire without issuing an
order accepting or denying the change because the
Commissioners are divided two against two as to the
lawfulness of the change . . . or if the Commission lacks a
quorum” then:
        (A) the failure to issue an order accepting or
            denying the change by the Commission
            shall be considered to be an order issued by
            the Commission accepting the change for
            purposes of section 825l(a) of this title [FPA
            § 313(a)]; and

       (B) each Commissioner shall add to the record
           of the Commission a written statement
           explaining the views of the Commissioner
           with respect to the change. 29
Section 205(g) further established that if “a person seeks a
rehearing . . . and the Commission fails to act on the merits of
the rehearing request” within 30 days because the deadlock
continues, “such person may appeal under section 825l(b)
[FPA § 313(b)].” 30

28
   16 U.S.C. § 824d(g).
29
   Id. (emphasis added).
30
   Id. § 824d(g)(2).

                              18
      B.     Factual and Procedural Context

       “Since the FPA’s passage, electricity has increasingly
become a competitive interstate business, and FERC’s role has
evolved accordingly.” 31 Today, “[i]ndependent power plants
now abound, and almost all electricity flows not through ‘the
local power networks of the past,’ but instead through an
interconnected ‘grid’ of near-nationwide scope.” 32 To ensure
the reliable transmission of electricity from independent
generators to “load serving entities” (LSEs)—the
organizations that deliver electricity to retail consumers—
FERC has empowered nonprofit entities, including Regional
Transmission Organizations (RTOs), to manage segments of
the grid. 33 RTOs constitute “public utilities” under the FPA,
subject to FERC’s regulation. 34

        Intervenor PJM is one such RTO, managing a system
that serves approximately fifty million consumers in thirteen
mid-Atlantic and Midwestern states and the District of
Columbia. 35 Like other RTOs, PJM fulfills important
functions that include ensuring the grid maintains sufficient
electrical supply to meet demand during peak periods. 36 To
accomplish this, PJM manages a capacity market that

31
   Elec. Power Supply Ass’n, 577 U.S. at 267.
32
   Id. (quoting New York v. FERC, 535 U.S. 1, 7 (2002)).
33
    Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 155
(2016).
34
   NJBPU, 744 F.3d at 82.
35
   PJM Br. 3; see Hughes, 578 U.S. at 155.
36
   NJBPU, 744 F.3d at 82.

                             19
essentially “pay[s] participants for a promise to produce
electricity when called by PJM to do so.” 37

       In 2006, the Commission found the existing capacity
market was unjust and unreasonable because it maintained
insufficient capacity to keep the system reliable. 38 To remedy
this, FERC issued an order accepting a negotiated settlement
among power providers, utility companies, and state and local
authorities, which provided for the adoption of the Reliability
Pricing Model. 39 This model works essentially as follows:
               PJM predicts electricity demand
               three years ahead of time, and
               assigns a share of that demand to
               each participating LSE. Owners of
               capacity to produce electricity in
               three years’ time bid to sell that
               capacity to PJM at proposed rates.
               PJM accepts bids, beginning with
               the lowest proposed rate, until it
               has purchased enough capacity to
               satisfy projected demand. . . . [A]ll
               accepted capacity sellers receive
               the highest accepted rate, which is
               called the “clearing price.” LSEs

37
   PJM Br. 4 (citing NJBPU, 744 F.3d at 82 (explaining that
the capacity market ensures that “there are enough . . .
generators connected to the transmission grid for the system to
function at peak load.”)).
38
   See PJM Interconnection, L.L.C., 135 FERC ¶ 61,022 (2011)
(hereinafter 2011 Order) at ¶ 4.
39
   NJBPU, 744 F.3d at 79; see PJM Interconnection, L.L.C.,
117 FERC ¶ 61,331 (hereinafter 2006 Settlement Order).

                              20
             then must purchase from PJM, at
             the clearing price, enough
             electricity to satisfy their PJM-
             assigned share of overall projected
             demand. 40

       Besides allowing LSEs to satisfy their obligations to
provide a share of projected demand, this forward-looking
capacity auction serves another purpose, at least in theory:
sending market signals to suppliers to incentivize resource
development. 41 “A high clearing price in the capacity auction
encourages new generators to enter the market, increasing
supply and thereby lowering the [future] clearing price . . .
[while] a low clearing price discourages new entry and
encourages retirement of existing high-cost generators.” 42

        Because some participants both buy and sell capacity in
the auction, the auctions are theoretically vulnerable to
manipulation by exercise of monopsony power. 43 That is, net-
buyers—those who buy more capacity than they sell—could
artificially depress prices by selling capacity below its true
cost, skewing the market signals produced by the auction. 44

40
   Hughes, 578 U.S. at 155–56; see PPL Energyplus, LLC v.
Solomon, 766 F.3d 241, 251 (3d Cir. 2014); NJBPU, 744 F.3d
at 83–84. Technically, PJM operates multiple capacity
auctions. The one at issue in this appeal, and described here,
is the Base Residual Auction.
41
   Hughes, 578 U.S. at 155–56; see NJBPU, 744 F.3d at 84.
42
   Hughes, 578 U.S. at 155–56; see NJBPU, 744 F.3d at 84.
43
   NJBPU, 744 F.3d at 85.
44
   See FERC Br. 14–15; PJM Br. 6; NJBPU, 744 F.3d at 88–
89.

                              21
“[T]o address the concern that some market participants might
have an incentive to depress market clearing prices by offering
supply at less than a competitive level,” the 2006 Settlement
Order approved the implementation of the Minimum Offer
Price Rule (MOPR). 45

       The MOPR established in the 2006 Settlement Order
(2006 MOPR) was designed to detect bids suppressed through
monopsony power. An offer that failed a multilevel screening
process would be “mitigated,” or administratively raised to a
competitive level. 46 The 2006 MOPR applied only to new
market entrants, excluding nuclear, coal, and hydroelectric
resources as well as state-mandated resources. 47 In approving
this mechanism, FERC concluded that the MOPR was a
“reasonable method of assuring that net buyers do not exercise
monopsony power by seeking to lower prices through self
supply.” 48 Moreover, FERC determined that the MOPR’s
exception for “reliability projects built under state mandate is
reasonable because it enables states to meet their
responsibilities to ensure local reliability.” 49

      Within a few years, consistent with that responsibility,
New Jersey and Maryland launched initiatives to develop new
generation resources to address reliability and capacity

45
   2011 Order at ¶ 6 (citing 2006 Settlement Order at ¶ 103).
46
   NJBPU, 744 F.3d at 85.
47
   Id. at 86 (explaining that state-mandated resources consisted
of “any planned resource being developed in response to a state
regulatory or legislative mandate to resolve a projected
capacity shortfall”).
48
   2006 Settlement Order at ¶ 104; see NJBPU, 744 F.3d at 85.
49
   2006 Settlement Order at ¶ 104.

                              22
concerns in their states. 50 Both initiatives required new
generation resources to sell capacity in the PJM markets, and
both intended to offer the capacity a price below cost to ensure
the new resources would clear. 51

        P3, who is also one of the Petitioners in this action,
responded by filing a § 206 complaint with FERC, calling for
an end to the state-mandated resources exception in addition to
other modifications. 52 PJM then filed a revised tariff pursuant
to § 205, which FERC approved in 2011 with some alterations
(2011 Order). The 2011 MOPR eliminated the state-mandated
resources exemption, “declin[ing] to accord states an
opportunity to justify their initiatives on policy grounds,
instead . . . requiring them to submit cost-based offers like other
entrants or suffer the consequences of mitigation.” 53 At the
same time, the new MOPR added exemptions for wind and
solar resources, with the result that after 2011, only natural gas
facilities were subject to mitigation. 54

     Several parties petitioned this Court for review of the
2011 Orders, which we denied in 2014. 55 With respect to

50
   NJBPU, 744 F.3d at 87.
51
   Id.
52
   Id.
53
   Id. at 91 (“FERC . . . conclud[ed] that the exemption needed
to be eliminated due to ‘mounting evidence of risk from what
was previously only a theoretical weakness in the MOPR
rules,’ namely, that state-subsidized resources would suppress
auction prices.”).
54
   Id. at 106.
55
   Id. at 112. During the pendency of this Court’s decision in
NJBPU, aspects of the 2011 tariff not relevant to the instant

                                23
FERC’s elimination of the state-mandated resources
exemption on the grounds that they would suppress auction
prices, we observed that while “it could easily be argued that
this danger was foreseeable in 2006 when the MOPR was first
approved, FERC has adequately advanced a rationale for its
about-face . . . . As such, it cannot be said that FERC acted
without substantial evidence.” 56

       In 2016, power suppliers filed a § 206 complaint with
FERC, challenging the MOPR’s exclusive application to new
market entrants. They argued that such a limitation was unjust
and unreasonable because it “allowed below-cost offers from
existing resources under newly-enacted state subsidy programs
to unjustly displace non-subsidized resources.” 57 A three-year
process culminated with FERC’s two-to-one vote in December
2019, ordering PJM to extend the MOPR to mitigate offers
from “both new and existing resources” and any resource either
receiving or eligible to receive a state subsidy (2019 MOPR). 58
The goal, FERC said, of this dramatic expansion was to
“protect PJM’s capacity market from the price-suppressive
effects of resources receiving out-of-market support by
ensuring that such resources are not able to offer below a
competitive price.” 59 The sole opposing Commissioner issued
a dissent, arguing, among other things, that while “the MOPR
once targeted efforts to exercise market power on behalf of

matter were amended in a compromise approved by FERC
order in 2013. See id. at 93–94.
56
   Id. at 102.
57
   P3 Br. 15; see Calpine Corp. v. PJM Interconnection, L.L.C.,
169 FERC ¶ 61,239 (hereinafter 2019 Order).
58
   2019 Order at ¶¶ 1–2, 5; see EPSA Br. 8; FERC Br. 18–19.
59
   2019 Order ¶ 5.

                              24
load and directly reduce the capacity market price, it now
targets state resource decisionmaking, and particularly state
efforts to address the externalities of electricity generation.” 60

        The 2019 MOPR prompted swift opposition. 61 Dozens
of parties sought to overturn the 2019 MOPR, including
“consumer advocate groups, state public utility agencies,
electric cooperatives [and] generators, clean energy
organizations, and environmental groups.” 62 These appeals
were consolidated in the Seventh Circuit and remain in
abeyance pending this action. 63

        On July 30, 2021, PJM made another § 205 filing,
setting forth a revised MOPR (2021 MOPR) to replace the
expansive one it set forth in 2019. PJM acknowledged that,
over the previous three years, state investments in renewable
and nuclear resources had proliferated, in part because of
states’ unabated and legitimate interest in “address[ing]
externalities that are not accounted for in PJM’s wholesale
markets.” 64 By “pricing out resources from the capacity
market” and failing to account for those resources when
committing capacity, PJM stated, the 2019 MOPR was
distorting market signals by “incentiv[izing] resources to be
built that are not needed to maintain reliability” in light of those
investments. 65 Moreover, the 2019 MOPR was incenting

60
   2019 Order (Glick, dissenting), ¶ 16.
61
   FERC Br. 20.
62
   FERC Br. 20.
63
   FERC Br. 20–21; see Ill. Commerce Comm’n v. FERC, Nos.
20-1645, et al. (7th Cir.).
64
   JA0178.
65
   JA0178, 181.

                                25
market participants to exit the capacity market to “meet their
policy and business objectives,” 66 a shift that threatened to
“exacerbate[]the very price suppression issue [that the 2019
MOPR] seeks to mitigate.” 67 The result for consumers, PJM
concluded, would be that those in states providing subsidies
would “pay[] twice, i.e., for both the excluded resources and
the resource committed through the auction because the
excluded resource did not clear” while those in other states
would see “a capacity cost increase, when . . . the auction
commits a resource that had a higher Sell Offer than the
excluded resource’s original offer.” 68 PJM concluded:
      [W]hile state policies favoring certain
      generation resources may ultimately cause a
      reduction in capacity clearing prices, such an
      outcome “should not be interpreted as a
      harmful secondary impact of one state’s
      policies on other states. Rather, the reduction in
      prices is a natural consequence of the PJM
      market appropriately reflecting state policies
      and consumer preferences for certain types of
      resources. Such state subsidies only lower total
      costs for consumers in other states.” 69
       PJM explained that the 2021 MOPR would return to “its
original purpose by focusing on prohibiting and mitigating the
exercise of buyer-side market power.” 70 The 2021 “focused”
MOPR would “generally accommodate both state policies

66
   JA0182.
67
   JA0185.
68
   JA0179–80.
69
   JA0180.
70
   JA0171.

                              26
regarding generation resource mix and the long-standing
business models of public power entities,” 71 while nonetheless
barring state action, such as those that New Jersey and
Maryland had pursued in 2011, that would “directly interfere
with the auction clearing outcomes.” 72 To this end, the 2021
MOPR would mitigate offers in just two situations: “(1) where
a capacity resource has the ability and incentive to exercise
buyer-side market power, and (2) where a capacity resource
receives state subsidies under a state program that is likely
preempted by the Federal Power Act.” 73

       When the 2021 MOPR was filed, FERC had four sitting
commissioners. The commissioners deadlocked two-to-two
on the new tariff, failing to issue an order accepting or denying
the change within sixty days. On September 29, 2021, the
Commission issued a secretarial notice stating that the new
2021 MOPR was in effect by operation of law. Consistent with
§ 205(g)(1)(B), two commissioners (including the chair) filed
a Joint Statement articulating their reasons for supporting the
new tariff, while the other commissioners filed separate
statements explaining their opposition.

     All rehearing requests were denied without an order on
November 29, 2021. This petition followed.

II.    Standing

       An organization suing on its members’ behalf must
establish associational standing, demonstrating that “(1) at

71
   JA0194.
72
   JA0190.
73
   JA0173; see FERC Br. 22; PJM Br. 23.

                               27
least one of its members would have standing to sue in his or
her own right; (2) ‘the interests it seeks to protect are germane
to the organization’s purpose’; and (3) ‘neither the claim
asserted nor the relief requested requires the participation of
[its] individual members.’” 74 To meet the first element of
associational standing, the organization must establish the
three familiar components that form “the irreducible
constitutional minimum of standing”:                injury-in-fact,
causation, and redressability. 75

       The Petitioners have met their burden. FERC observes
that the Generators do not articulate any injuries in their
opening briefs. 76      Nevertheless, the Joint Appendix
incorporates records from the Generators’ protest before FERC
that demonstrate that their members suffered economic losses
as a result of the 2021 MOPR. An affidavit attached to P3’s
reply brief elaborates on these harms. 77 We find that the

74
   See Sierra Club v. FERC, 827 F.3d 59, 65 (D.C. Cir. 2016);
see also Belmont Mun. Light Dep’t v. FERC, 38 F.4th 173, 185
(D.C. Cir. 2022) (“Where there are multiple plaintiffs who
assert overlapping arguments, at least one petitioner must have
standing to seek each form of relief requested in the petitions
for review.” (citing Nat’l Ass’n of Regul. Util. Commissioners
v. FERC, 964 F.3d 1177, 1184 (D.C. Cir. 2020))).
75
   Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992); see
Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc.,
528 U.S. 167, 180–81 (2000); Kansas Corp. Comm’n v. FERC,
881 F.3d 924, 929 (D.C. Cir. 2018) (quoting Sierra Club v.
EPA, 292 F.3d 895, 899–900 (D.C. Cir. 2002) (citations
omitted)).
76
   FERC Br. 35.
77
   P3 Reply Br. 3, Attachment A (Decl. Glen Thomas).

                                28
Generators have met their burden to articulate a concrete and
particularized injury, and that the cause of their injuries is
traceable to FERC’s approval, by operation of law, of the 2021
MOPR. 78 We also hold that the State Entities have met their
burden to establish a cognizable injury, having demonstrated
that they “represent the interests of the states in protecting their
citizens and electric ratepayers in the traditional government
field of utility regulation.” 79
        FERC also argues that the Petitioners failed to establish
that their purported injuries are redressable in this action.
Specifically, FERC argues that even if we were to vacate the
order by operation of law that allowed the 2021 MOPR to go
into effect, the 2021 MOPR would remain in effect until a new
tariff could be established upon remand. 80 We disagree.
Contrary to FERC’s assertion, “[v]acating or rescinding
invalidly promulgated regulations has the effect of reinstating
prior regulations.” 81 While these potentially “disruptive

78
   See Belmont Mun. Light Dep’t, 38 F.4th at 185.
79
   Id. at 186 (citing Maryland People’s Counsel v. FERC, 760
F.2d 318, 321 (D.C. Cir. 1985)); see State Entities Reply Br.
5–6.
80
   FERC Br. 39.
81
   Abington Mem’l Hosp. v. Heckler, 750 F.2d 242, 244 (3d
Cir. 1984); Prometheus Radio Project v. F.C.C. (Prometheus
I), 652 F.3d 431, 453 n.25 (3d Cir. 2011) (“Because we vacate
the NBCO rule in the 2008 Order, the rule in existence prior to
that order will remain in effect until the FCC promulgates new
cross-ownership regulations.”); see Council Tree Commc’ns,
Inc. v. F.C.C., 619 F.3d 235, 258 (3d Cir. 2010) (“vacating [an
FCC] rule will mean that” the prior rule “will once again”
govern the regulated activity); Paulsen v. Daniels, 413 F.3d
999, 1008 (9th Cir. 2005) (“The effect of invalidating an

                                29
consequences”82 may militate toward less drastic solutions, 83
such a remedy is nonetheless within the scope of our statutory
authority.

III.   Standard of Review

       At the threshold, the parties dispute the applicable
standard and scope of judicial review upon a petition
proceeding under § 205(g).

agency rule is to reinstate the rule previously in force.”); Action
on Smoking and Health v. CAB, 713 F.2d 795, 797 (D.C. Cir.
1983) (per curiam) (“To ‘vacate,’ as the parties should well
know, means ‘to annul; to cancel or rescind; to declare, to
make, or to render, void; to defeat; to deprive of force; to make
of no authority or validity; to set aside.’ . . . . [T]he judgment
of this court had the effect of reinstating the rules previously in
force.”).
82
   Ameren Servs. Co. v. FERC, 880 F.3d 571, 584 (D.C. Cir.
2018) (quoting Black Oak Energy, LLC v. FERC, 725 F.3d
230, 244 (D.C. Cir. 2013)); see Prometheus Radio Project v.
Fed. Commc’ns Comm’n (Prometheus II), 824 F.3d 33, 52 (3d
Cir. 2016).
83
   See, e.g., Black Oak Energy, 725 F.3d at 244 (“Although we
remand, we do so without vacating . . . [after performing the
disruption analysis] we deem it better to preserve the status quo
as FERC reconsiders”); Ameren Servs. Co., 880 F.3d at 584
(vacating because “we are troubled by the prospect of allowing
the orders to continue”); see Belmont Mun. Light Dep’t v.
FERC, 38 F.4th 173, 187–88 (D.C. Cir. 2022) (determining
that a FERC order is severable and vacating only one
component).

                                30
       We review FERC orders under § 313(b) of the FPA and
§ 10(e) of the APA. 84 The FPA directs that FERC’s factual
findings, “if supported by substantial evidence, shall be
conclusive.” 85 Substantial evidence exists where the
administrative record contains “more than a scintilla, but . . .
something less than a preponderance of the evidence.” 86 Under
the APA, we must “hold unlawful and set aside” agency action
that is deficient for reasons including that it is “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law,” or “in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right.” 87 In short,
we affirm FERC orders as long as the administrative record
shows the Commission “examined the relevant data and

84
   16 U.S.C. § 825l(b); 5 U.S.C. § 706(2).
85
   16 U.S.C. § 825l(b).
86
   NJBPU, 744 F. 3d at 94 (quoting La. PSC v. FERC, 522 F.3d
378, 395 (D.C. Cir. 2008)); accord Mars Home for Youth v.
NLRB, 666 F.3d 850, 853 (3d Cir. 2011) (“Substantial
evidence is more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.” (citations and quotations omitted)). See
also NJBPU, 744 F.3d at 94 (“The question we must answer ...
is not whether record evidence supports [petitioner]’s version
of events, but whether it supports FERC’s.” (quoting Fla. Mun.
Power Agency v. FERC, 315 F.3d 362, 368 (D.C. Cir. 2003))).
87
   5 U.S.C. § 706(2); see City of Newark v. FERC, 763 F.2d
533, 545 (3d Cir. 1985) (court must determine “whether a
rational basis exists for [FERC’s] conclusion, whether there
has been an abuse of discretion, or . . . whether the
Commission’s order is arbitrary or capricious or not in
accordance with the purpose of the [FPA].”).

                                 31
articulated a rational connection between the facts found and
the choice made.” 88
       FERC urges, and we agree, that § 205(g) did not alter
these familiar standards. 89 Rather, the provision clarified the
universe of action subject to our review. Prior to its enactment,
the plain text of the FPA did not convey Congress’s intent to
allow our review of rate filings enacted by operation of law
pursuant to § 205(d). Congress addressed this deficiency with
§ 205(g), which unambiguously instructed that we construe
FERC’s inaction as an affirmative order “for the purposes of §
[313](a).” 90 Notably, Congress here referred to the very
provision setting forth a party’s right to seek the Commission’s
rehearing of an order by majority vote, which in turn provides
the basis for judicial review. 91 Indeed, § 205(g) specifies that

88
   NJBPU, 744 F.3d at 94 (quoting Sacramento Mun. Util. Dist.
v. FERC, 616 F.3d 520, 528 (D.C. Cir. 2010)); see also
Morgan Stanley Capital Grp. Inc. v. Pub. Util. Dist. No. 1 of
Snohomish Cnty., 554 U.S. 527, 532 (2008) (“The statutory
requirement that rates be ‘just and reasonable’ is obviously
incapable of precise judicial definition, and we afford great
deference to the Commission in its rate decisions.”); N. Penn.
Gas Co. v. FERC, 707 F.2d 763, 766 (3d Cir. 1983) (FERC’s
exercise of its expertise carries “a presumption of validity”).
89
   See FERC Br. 34–35, 49. While we generally defer to an
agency’s reasonable interpretation of ambiguity in a statute it
administers “through application of its expertise,” no deference
doctrine controls the scope of a court’s jurisdiction. See
Allegheny Def. Project v. FERC, 964 F.3d 1, 11 (D.C. Cir.
2020).
90
   § 205(g) (emphasis added); see 16 U.S.C. § 825l(a).
91
   See 16 U.S.C. § 825l(b) (“Any party to a proceeding under
this chapter aggrieved by an order issued by the Commission

                               32
if the “Commission fails to act on the merits of the rehearing
request” within 30 days because the deadlock continues, “such
person may appeal under § [313](b).” 92 Thus, by reference, the
standard of review set forth in the FPA 93 applies to FERC
orders issued by operation of law pursuant to § 205(d). 94

       We reject the State Entities’ argument that we must
review “on a de novo basis, whether the tariff change is just
and reasonable as a predicate to deciding whether [FERC’s]
discretion to approve was properly exercised.” 95 This reading
contradicts the well-settled administrative law principle,
reflected in both the FPA and APA, that “‘a court is not to
substitute its judgment for that of the agency.’” 96 Moreover,
the sole authority cited by the State Entities to support its
reading concerns an inapposite statute (the Indian Gaming
Regulatory Act or IGRA), which at least one sister court has
rejected as an appropriate analog for the FPA because the
IGRA requires agency action while the FPA gives the agency
discretion to act. 97

in such proceeding may obtain a review of such order in the
United States court of appeals . . . .”).
92
   Id. § 824d(g)(2); see id. § 825l(b).
93
   See id. § 825l(b).
94
   § 205(g).
95
    State Entities Br. 21–22 (citing Amador County, Cal. v.
Salazar, 640 F.3d 373, 375 (D.C. Cir. 2011)).
96
   Motor Veh. Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983).
97
   Compare State Entities Br. 22, with Public Citizen, 839 F.3d
at 1173 (“Section 205(a)’s statement concerning the
unlawfulness of unjust and unreasonable rates does not rise to
an inexorable command like that found in IGRA”).

                              33
        To carry out Congress’s directive to construe FERC
inaction as an affirmative order, we must next determine what
constitutes evidence of the agency’s reasoning for the purposes
of § 205(g). 98 The Generators insist that nothing does, arguing
that a deadlocked Commission can produce “no institutional
findings of fact or conclusions of law to which this Court might
defer.” 99 While they acknowledge Congress’s mandate in §
205(g)(1)(B) that the members of a deadlocked Commission
must enter their reasoning into the record, they argue that these
statements are unattributable to the agency and are intended
only to “facilitate compromises” and promote transparency and
good government. 100 Because any order arising by operation
of law would, by the Generators’ logic, lack any agency
rationale, they conclude that any petition for rehearing
pursuant to § 205(g) must “inevitably” 101 lead us to find such
an order arbitrary and capricious. 102

98
   See Sprint Nextel Corp. v. F.C.C., 508 F.3d 1129, 1132 (D.C.
Cir. 2007) (“When the Commission failed to [act] within the
statutory period, Congress’s decision—not the agency’s—took
effect.”).
99
    P3 Br. 29, 34–36 (“[a]ctions of the Commission shall be
determined by a majority vote of the members present” (citing
42 U.S.C. § 7171(e)); accord EPSA Br. 18, 21, 23; State
Entities Br. 29–30 (citing Public Citizen, 839 F.3d at 1169).
100
    P3 Br. 36–37; see EPSA Br. 18, 23, 27 (quoting F.C.C. v.
Prometheus Radio Project (Prometheus III), 141 S. Ct. 1150,
1158 (2021)); see State Entities Br. 29.
101
    EPSA Br. 19–20; P3 Br. 33–35.
102
    The Generators also wrongly contend that because orders
by operation of law are necessarily arbitrary and capricious,
they must be set aside. See P3 Br. 29, 35 (“[J]udicial review of

                               34
       The Generators’ argument is inconsistent with our
responsibility to avoid interpreting statutory provisions in ways
that “render statutory language a nullity and leave entire
operative clauses with ‘no job to do.’” 103 Congress established
in § 205(d), and underscored in § 205(g), that a tariff may
change by operation of law, 104 consistent with the principle that

deadlocked FERC proceedings would inevitably end in
vacatur.” (emphasis added)); EPSA Br. 15 n. 3 (incorporating
by reference P3’s arguments concerning vacatur); EPSA Br.
16, 25, 43. But vacatur is never a foregone conclusion. First,
the plain text of the FPA authorizes us not only to vacate, but
also to modify an improper order. 16 U.S.C. § 825l(b).
Second, to determine the appropriateness of vacatur, we
conduct a fact-sensitive analysis accounting for “the gravity of
the orders’ flaws, and the ‘disruptive consequences’ that may
result.” Ameren Servs. Co., 880 F.3d at 584 (quoting Black
Oak Energy, LLC, 725 F.3d at 244; see Prometheus II, 824
F.3d at 52; Belmont Mun. Light Dep’t, 38 F.4th at 187–88
(determining that a FERC order is severable and vacating only
one component). We further observe that while vacatur is the
Generators’ preferred remedy here, to adopt their theory
globally risks hampering the claims of future litigants seeking
redress by modification, and not vacatur. Accordingly, we
reject the Generators’ reading.
103
    Allegheny, 964 F.3d at 15 (quoting Doe v. Chao, 540 U.S.
614, 623 (2004)).
104
    § 824d(d) (“No change shall be made by any public utility
in any such rate, . . . rule, regulation, or contract relating
thereto, except after sixty days’ notice to the Commission and
to the public.” (emphasis added)); § 824d(g) (“With respect to
a change described in subsection (d), if the Commission
permits the 60-day period established therein to expire without

                               35
the “power to initiate rate changes rests with the utility and
cannot be appropriated by FERC in the absence of a finding
that the existing rate was unlawful.” 105 The Generators’ theory
would flip § 205(d)’s protective intent on its head, enabling any
aggrieved party to invalidate any rate change by operation of
law simply by virtue of requesting judicial review—a process
the Generators’ theory reduces to a mechanical exercise with
only one possible outcome. This cannot be right. If Congress’s
purpose were indeed to strip utilities of the protections afforded
by § 205(d), or to otherwise invalidate orders by operation of
law, it would have amended that portion of the statute
accordingly, not created a cumbersome workaround via §
205(g).

        Moreover, the Generators’ reading would sap §
205(g)(1)(B) of purpose. It is a “fundamental canon
of statutory construction that the words of a statute must be
read in their context and with a view to their place in the overall
statutory scheme.” 106 Here, § 205(g)(1)(B) appears as part of
an enumerated list of provisions concerning aggrieved parties’
right to seek rehearing and judicial review of a change arising
from agency inaction. It makes little sense to argue, as P3 does,
that Congress’s purpose in requiring the Commissioners to add
statements explaining their reasoning to the administrative
record could have been to “facilitate compromises” and

issuing an order accepting or denying the change . . . the failure
. . . shall be considered to be an order issued by the Commission
accepting the change for purposes of” judicial review
(emphasis added)).
105
      Atl. City Elec. Co., 295 F.3d at 10.
106
     King v. Burwell, 576 U.S. 473, 492 (2015) (quoting Util. Air
Reg. Grp. V. EPA., 573 U.S. 302, 320 (2014)).

                                36
promote transparency and good government only. 107 The right
to judicial review accrues after a party has been aggrieved by
a change, and therefore after the time for compromise has
passed. 108
        We agree with FERC that Congress intended “the
Commissioners’ statements [to] play an integral role in the
Court’s review.” 109 Here, the statements of the deadlocked
Commissioners do more than record each person’s individual
rationale for affirming or rejecting the rate filing. Collectively,
they illuminate the agency’s reasons for inaction, which
Congress has instructed us to construe as an affirmative
order. 110 Because FERC must accept a § 205 rate filing absent
“a finding that the existing rate was unlawful,” 111 our thorough
consideration of the entire record must ensure that the

107
    P3 Br. 37.
108
    Notably, in neither of § 205(g)’s two enumerated clauses
did Congress qualify “change” with any adjective (e.g.,
“proposed” or “potential”) to indicate that such change was
pending, and not already in effect. Rather, the text plainly
refers to the change in tariff effected by the agency’s inaction,
pursuant to § 205(d).
109
    FERC Br. 4.
110
    P3 repeatedly asks us to vacate the September 29, 2021
Notice, treating that document as if it were a FERC order. P3
confuses the nature of that instrument, which does not itself
constitute reviewable FERC action but rather memorialized the
results, already in effect, of the Commission’s inaction.
111
    Atl. City Elec. Co., 295 F.3d at 10; see Public Citizen, 839
F.3d at 1174 (noting the FPA does “not compel FERC to either
set the disputed rates for hearing or affirmatively disapprove
any unjust or unreasonable rates through the Section 205
process.”).

                                37
Commissioners who did not find the 2021 MOPR unlawful
engaged in “decisionmaking [that was] reasoned, principled,
and based upon the record.” 112
        While unusual, such a reading has precedent. In the
Federal Election Commission Act, Congress similarly
incorporated language making clear that a party aggrieved “by
a failure of the Commission to act” may seek administrative
appeal and judicial review. 113 As the D.C. Circuit Court of
Appeals explained in Public Citizen, when the Federal Election
Commission deadlocks over whether to exercise its discretion
to act, “[t]o make judicial review a meaningful exercise,’ [the
court must] treat the statements of the Commissioners voting
to dismiss the complaint as the administrative record.” 114 The
court in Public Citizen declined to follow this approach
because, at the time, the FPA did not contain “a similar
congressional indication” about how to construe agency
deadlock. 115 With § 205(g), Congress filled that gap. 116

112
    W. Res., Inc. v. FERC, 9 F.3d 1568, 1572 (D.C. Cir. 1993)
(quoting Columbia Gas Transmission Corp. v. FERC, 628
F.2d 578, 593 (D.C. Cir. 1979)); see Fed. Election Comm’n v.
Nat’l Republican Senatorial Comm., 966 F.2d 1471, 1476
(D.C. Cir. 1992) (these commissioners “constitute a
controlling group for purposes of the decision[ and] their
rationale necessarily states the agency’s reasons for acting as it
did.”).
113
    52 U.S.C. § 30109(a)(8)(A).
114
    Public Citizen, 839 F.3d at 1170 (citing Fed. Election
Comm’n, 966 F.2d at 1476); see Common Cause v. Fed.
Election Comm’n., 842 F.2d 436, 450 (D.C. Cir. 1988).
115
    Public Citizen, 839 F.3d at 1171.
116
    For this reason, P3 errs by relying on Public Citizen, which
turned on the absence of such an indication, for the proposition

                               38
        We disagree that § 205(g) contradicts the Commission’s
enabling statute as codified at 42 U.S.C. § 7171(e), which
states that “[a]ctions of the Commission shall be determined by
a majority vote of the members present.” 117 Section 205(g)
concerns only how agency inaction should be construed for the
limited purposes of rehearing and review but does not
illuminate what constitutes agency action per se. 118 Even if §
205(g) did contradict § 7171(e), traditional rules of statutory
interpretation counsel that “[s]pecific terms prevail over the
general in the same or another statute which otherwise might
be controlling.” 119       Here, Congress identified narrow
circumstances under which to construe inaction, in a particular
way, for a specific purpose. 120

that FERC inaction cannot be construed as action for the
purposes of judicial review.
117
    P3 Br. 29, 34–36 (citing 42 U.S.C. § 7171(e) (“[a]ctions of
the Commission shall be determined by a majority vote of the
members present”); accord EPSA Br. 18, 21, 23; State Entities
Br. 29–30 (citing Public Citizen, 839 F.3d at 1169).
118
    See 42 U.S.C. §7171(e).
119
    Superior Oil Co. v. Andrus, 656 F.2d 33, 36 (3d Cir. 1981))
(quoting Fourco Glass Co. v. Transmirra Corp., 353 U.S. 222,
228–29 (1957)).
120
    We have no “grave constitutional concern” that a single
Commissioner’s views could stand for all when a rate filing
takes effect because the Commission has deadlocked. EPSA
Br. 27. Under the terms of the statute, this circumstance would
always result in two Commissioners’ views controlling—the
same number that would constitute an unobjectionable
majority among a quorum of three Commissioners.
Nevertheless, we do not decide today whether a constitutional

                              39
       For the foregoing reasons, we hold first that where a
quorum of FERC Commissioners deadlocks two-to-two on a §
205 rate filing, our review of the resulting order must adhere to
the same standard that would govern our review of an order
approved by a FERC majority. 121 Second, we hold that our
review properly encompasses the entire record, including the
four Commissioners’ § 205(g)(1)(B) statements.

IV.    Merits

       We now reach the substance of the parties’ dispute.
Construing the agency’s deadlocked vote on the 2021 MOPR
as an affirmative order consistent with § 205(g), and
considering the Commissioners’ recorded statements, we
conclude that the rationale set forth in the Joint Statement for
approving the 2021 MOPR was neither arbitrary nor capricious
and was supported by substantial evidence in the record. We
are not persuaded otherwise by the arguments set forth in the
other Commissioners’ statements. Accordingly, we will deny
the Generators’ petitions on the merits. 122

concern might arise when a rate filing goes into effect in the
absence of a quorum, in which case the “views of a single
Commissioner [could] . . . gain the force of law.” EPSA Br.
27, 28 (citing Seila Law LLC v. Consumer Fin. Prot. Bureau,
140 S. Ct. 2183, 2201 (2020)).
121
    NJBPU, 744 F.3d at 94 (citing Sacramento Mun. Util.
Dist., 616 F.3d at 528).
122
    P3 suggests that FERC’s order by operation of law pursuant
to § 205 was facially improper because it overturned a tariff
ordered by FERC under § 206, professing to be “unaware of
any authority that permits a public utility to change rates

                               40
        In reviewing FERC’s orders, we consider only “whether
a rational basis exists for a conclusion, whether there has been
an abuse of discretion, or . . . whether the Commission’s order
is arbitrary or capricious or not in accordance with the purpose
of the [FPA].” 123 “[B]ecause issues of rate design . . . involve
policy judgments that lie at the core of the regulatory mission,
our review of whether a particular rate design is just and

imposed on that utility by FERC under FPA section 206.” P3
Br. 31, 33 (“[T]he Notice must be vacated because it disregards
the text and structure of the FPA by elevating a mere filing
under section 205 above FERC orders under section 206.”).
The State Entities similarly suggest the existence of a “higher
Section 206 standard,” State Entities Br. 28, insisting that as a
per se matter, “FERC cannot overturn its prior precedent
through inaction,” State Entities Br. 28. Both parties are
incorrect. It is well-settled that “[n]othing in section 206
sanctions denying petitioners their right to unilaterally file rate
and term changes.” Atl. City Elec. Co., 295 F.3d at 10
(collecting cases). Indeed, “courts have repeatedly held that
FERC has no power to force public utilities to file particular
rates unless it first finds the existing filed rates unlawful . . . .
Nor may FERC prohibit public utilities from filing changes in
the first instance.” Id. As intervenors for the respondent note,
P3’s interpretation would erode the careful balance that
Congress has achieved in the statute by “gradually
eliminat[ing] the utility’s rights under Section 205 . . . to set
the rates it will charge prospective customers, and change them
at will, subject to review by the Commission.” Respondent-
Intervenors Br. 29 (quoting Atl. City Elec. Co., 295 F.3d at 10)
(cleaned up). Accordingly, we reject P3’s suggestion that a §
205 filing cannot displace a tariff set by § 206.
123
    City of Newark, 763 F.2d at 545.

                                 41
reasonable is highly deferential.” 124 The MOPR dispute
concerns precisely such a judgment: How best to protect the
integrity of the capacity market, in view of the diverse and
legitimate interests of its myriad stakeholders and the
innumerable factors that influence price.
        FERC has approved various approaches to this
conundrum since 2006. We have previously observed that
“FERC is permitted to weigh the danger of price suppression
against the counter-danger of over-mitigation, and determine
where it wishes to strike the balance.” 125 Here, the 2021
MOPR reflected a shift away from the regime embraced in the
2019 MOPR, at least arguably toward the purpose of
“address[ing] the concern that some market participants might
have an incentive to depress market clearing prices by offering
supply at less than a competitive level.” 126

       Such shifts are permissible. An agency may alter its
“view of what is in the public interest.” 127 The fact that
contrary agency precedent exists “gives us no more power than
usual to question the Commission’s substantive
determinations.” 128 The agency need not establish that “the

124
    Md. Pub. Serv. Comm’n v. FERC, 632 F.3d 1283, 1286
(D.C. Cir. 2011).
125
    NJBPU, 744 F.3d at 109.
126
    2011 Order at ¶ 6 (citing 2006 Settlement Order at ¶ 103).
127
    Motor Vehicle Mfrs. Ass’n of United States, Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 57 (1983)
(quoting Greater Bos. Television Corp. v. F.C.C., 444 F.2d
841, 852 (D.C. Cir. 1970)); see NJPBU, 744 F.3d at 100.
128
     NJPBU, 744 F.3d at 100 (quoting Nat’l Cable &
Telecomms. Ass’n v. F.C.C., 567 F.3d 659, 669 (D.C. Cir.
2009)); see also Elec. Consumers Res. Council v. FERC, 407

                              42
reasons for the new policy are better than the reasons for the
old one; it suffices that the new policy is permissible under the
statute, that there are good reasons for it, and that the
agency believes it to be better.” 129

      We hold that FERC met these criteria in constructively
approving the 2021 MOPR. The eighty-six-page Joint
Statement acknowledged that the 2021 MOPR reflects a
change in policy and identified reasons for finding the change
just and reasonable. 130        Specifically, the authoring

F.3d 1232, 1239 (D.C. Cir. 2005) (stating that a court’s
deference to FERC on complex rate market design “is based
on the understanding that the Commission will monitor its
experiment and review it accordingly”).
129
    F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 515
(2009).
130
    The two commissioners who concluded the 2021 MOPR
was not just and reasonable issued separate statements
articulating their views.            While non-identical, the
commissioners reached the same core conclusion: The 2021
MOPR did not meet the just and reasonable standard because
it was anti-competitive. See JA0129 (Christie Statement)
(“[T]he PJM MOPR Proposal, now in effect by operation of
law, forfeits any remaining credibility to the claim that the PJM
capacity market is based on actual competition or is run for the
benefit of consumers”); JA0169 (Danly Statement) (“PJM’s
proposal eliminating all mitigation of the price-suppressive
effects of state subsidies is irredeemably inconsistent with FPA
section 205’s requirement that proposed rates must be just and
reasonable.”). As discussed herein, these policy concerns are
addressed in the Joint Statement, along with the authoring
commissioners’ reasons for not adopting them, reasons which

                               43
Commissioners asserted that a more narrowly targeted MOPR
would benefit “investors and consumers alike” by “more
accurately reflect[ing] the facts and realities on the ground,”131
while “provid[ing] a sufficient opportunity for resources to
recover their costs.” 132 The Joint Statement noted that its
policy might result in lower prices on the capacity market than
under the expanded 2019 MOPR but concluded that such a
result is “just and reasonable because the market will reflect
supply and demand fundamentals,” 133 which include state
policies alongside federal policies, “[s]iting policies, tax rules,
and labor regulations,” among others. 134 According to the
Joint Statement, the 2019 MOPR allowed for an “artificially
inflated price [that] will falsely signal that new entry is needed
or that existing resources should forestall retirement,” with
potentially “detrimental effects on PJM’s energy and ancillary
services markets.” 135

       The Joint Statement identified specific changed
circumstances to support these conclusions, including a
proliferation of state policies to shape the resource mix that had
occurred over the prior three years, largely to “address
externalities that are neither accounted for nor compensated in

are neither arbitrary nor capricious and are based on substantial
evidence in the record. Because it may not, our conclusion in
this regard does not derive from our own policy preferences.
Rather, it accepts and reflects our role here as circumscribed
by statute and precedent.
131
    JA0060 ¶ 44.
132
    JA0060 ¶ 45.
133
    JA0067 ¶ 55.
134
    JA0068 ¶¶ 56, 57.
135
    JA0067 ¶ 54.

                                44
PJM’s wholesale markets.” 136 The Joint Statement noted that
“[s]tates are playing a more active role in shaping the resource
mix—including both entry and exit—than they were at the time
the Commission issued previous orders addressing the scope
and purpose of PJM’s MOPR.” 137 Policies passed since 2018
alone could together “support the entry of more than 44,000
MW of capacity into PJM’s capacity market over the next”
fifteen years, the Joint Statement noted. 138 The authoring
Commissioners observed that failing to account for the
contributions of these resources to capacity could cost
consumers a total of $3.4 billion by 2030. 139

       The Joint Statement also analyzed the results of the first
base residual auction held under the 2019 MOPR. The
authoring Commissioners noted that a generating station
benefitting from one state’s zero-emission credit failed to clear,
and that “capacity prices likely increased by over $10/MW-
day, or an additional $90 million in the ComEd zone, as a
result”—harms that “can be expected to increase significantly
as states continue to support resources that will not benefit
from the [2019] MOPR’s” exclusions. 140 The Joint Statement
also pointed to evidence that “several states have considered

136
    JA0057 ¶ 36.
137
    JA0070 ¶ 59.
138
    JA0084 ¶ 80.
139
    JA0064 ¶ 50. See Constellation Energy Commodities Grp.,
Inc. v. FERC, 457 F.3d 14, 24 (D.C. Cir. 2006) (“[I]t is within
the scope of the agency’s expertise to make . . . a prediction
about the market it regulates, and a reasonable prediction
deserves our deference notwithstanding that there might also
be another reasonable view.”) (cleaned up).
140
    JA0066 ¶ 52.

                               45
abandoning the capacity market altogether rather than have the
resources needed to meet their public policy goals be subjected
to mitigation,” an outcome that would threaten the purpose and
structure of the market itself. 141

       Petitioner EPSA contends that the Joint Statement failed
to address the validity of any potential reliance interests,
arguing the “parties demonstrated that investors have sunk
many billions of dollars into constructing new power plants
and maintaining existing ones, all in reliance on the existence
of PJM market mechanisms that ensure a competitive
marketplace, rather than a marketplace skewed by the
participation of un-economic resources.” 142 But an agency not
“writing on a blank slate” is required only to “assess whether
there were reliance interests, determine whether they were
significant, and weigh any such interests against competing
policy concerns.” 143 Here, the Commissioners considered
“arguments that the Expanded [2019] MOPR must be
preserved because investors relied on it” but determined these
did not “tilt the balance” against their articulated policy
concerns, in light of the fact that the 2019 MOPR had been in
place for a relatively short period during which it was “well-
publicized” that “PJM was exploring the possibility of
replacing the Expanded MOPR.” 144 As we concluded in 2014,
responding to similar arguments, “we are not unsympathetic to
[investor’s] arguments that they reasonably relied” on the
terms of the prior MOPR, but nevertheless “find no fault with

141
    JA0070 ¶ 58.
142
    EPSA Br. 30.
143
     Dep’t of Homeland Sec. v. Regents of the Univ. of
California, 140 S. Ct. 1891, 1915 (2020).
144
    JA0071 ¶ 61.

                              46
FERC’s ability to, and reasons for” constructively approving
the new one. 145

       P3 challenges various technical provisions of the 2021
MOPR, devised by PJM to accomplish its twin policy
objectives of mitigating offers resulting from the exercise of
buy-side market power and conditioned state support. From
these objections, 146 P3 concludes that because PJM’s proposed
mechanism fails to ensure adequately that “neither buyer nor
seller have market power, ‘the prevailing price in the
marketplace cannot be the final measure of “just and
reasonable” rates mandated by the Act.’” 147

145
    NJBPU, 744 F.3d at 100.
146
     P3 generally alleges that both prongs are “unjust,
unreasonable, and unduly discriminatory,” without articulating
precisely how. With respect to the Buyer Side Market Power
and Conditioned State Support provisions, including that (1)
PJM’s proposed self-certification process is insufficiently
robust, (2) that its requirement that sellers self-certify their
intent is “easily evaded” and runs counter to prior policy
approved by FERC; (3) the tests required upon review by the
PJM and/or Independent Market Monitor are evadable and rely
on concepts rejected, with FERC approval, in earlier MOPRs;
and (4) the test is insufficiently transparent and affords too
much discretion to PJM and the Independent Market Monitor.
See P3 Br. 51–54. With respect to the provisions related to
Conditioned State Support, P3 argues that these are “riddled
with practical defects,” improperly exempts existing policies,
and only mitigates state actions are already unlawful under the
Supreme Court’s decision in Hughes v. Talen Energy Mktg,
LLC, 578 U.S. 150 (2016). P3 Br. 49–50.
147
    P3 Br. 47 (quoting FPC v. Texaco Inc., 417 U.S. 380, 397

                              47
        We disagree. “The statutory requirement that rates be
‘just and reasonable’ is obviously incapable of precise judicial
definition,” 148 and “FERC’s authority to determine whether
wholesale rates are ‘just and reasonable’ is exclusive.” 149 We
“properly defer[] to policy determinations invoking the
Commission’s expertise in evaluating complex market
conditions.” 150 Although “courts have never given regulators
carte blanche,” 151 our review is “limited to ensuring that the
Commission has made a principled and reasoned decision
supported by the evidentiary record.” 152 Here, the Joint
Statement responds to both the technical and policy criticisms
levelled by P3, concluding that the mechanisms proposed by
PJM were sufficient to mitigate anti-competitive offers while
“appropriately balanc[ing] the risk of under- and over-

(1974)); see P3 Br. 47–48 (stating that the new rules “do
virtually nothing to prevent the exercise of state-sponsored
market power. Instead, they establish an opaque and toothless
process of exclusions and exceptions that ‘is even worse than
having no MOPR at all.’”) (quoting Comm’r Christie
Statement, JA0125–26 ¶ 3).
148
    Morgan Stanley Cap. Grp. Inc. v. Pub. Util. Dist. No. 1 of
Snohomish Cnty., Wash., 554 U.S. 527, 532 (2008).
149
    California ex rel. Lockyer v. FERC, 383 F.3d 1006, 1011
(9th Cir. 2004) (quoting Miss. Power & Light Co. v.
Mississippi, 487 U.S. 354, 371 (1988)).
150
    Tenn. Gas Pipeline Co. v. FERC, 400 F.3d 23, 27 (D.C. Cir.
2005).
151
    Emera Maine v. FERC, 854 F.3d 9, 22 (D.C. Cir. 2017)
(quoting Elec. Consumers Res. Council v. FERC, 747 F.2d
1511, 1514 (D.C. Cir. 1984)).
152
    Id. (quoting S. Cal. Edison Co. v. FERC, 717 F.3d 177, 181
(D.C. Cir. 2013)).

                              48
mitigation.” 153 We cannot conclude on this record that the
Commission’s constructive acceptance of PJM’s § 205 filing
as just and reasonable was arbitrary or capricious.

       Finally, we reject P3’s argument that the 2021 MOPR
“unlawfully discriminates against competitive power
suppliers,” as compared to state-sponsored resources, by
“reduc[ing] market prices below just and reasonable levels.” 154
As discussed above in depth, the Joint Statement set forth an
adequate rationale for permitting PJM to implement a less
expansive MOPR. 155 Moreover, as FERC argues, the FPA

153
    JA0096 ¶¶ 103, 105–06); see generally JA0100 ¶¶ 85–163.
154
    P3 Br. 39.
155
    Judge Roth also disagrees with the Generators’ contention
that the 2021 MOPR is unlawfully discriminatory because it
allows states to “‘impose [their] own policy choice on
neighboring States’ or otherwise intrude upon the ‘autonomy
of [other] States within their respective spheres.’” P3 Br. 42–
43 (quoting BMW of N. Am. v. Gore, 517 U.S. 559, 571 (1996))
(quotations omitted); EPSA Br. 34–47. Rather, Judge Roth
would conclude, consistent with New Jersey Board of Public
Utilities v. FERC, “what FERC has actually done here is permit
states to develop whatever capacity resources they wish, and to
use those resources to any extent that they wish, while
approving rules that prevent the state’s choices from adversely
affecting wholesale capacity rates.” NJBPU, 744 F.3d at 98;
accord Hughes, 578 U.S. at 166 (“Nothing in this opinion
should be read to foreclose . . . States from encouraging
production of new or clean generation through measures
‘untethered to a generator’s wholesale market participation.’”);
see Energy & Env’t Legal Inst. v. Epel, 793 F.3d 1169, 1173
(10th Cir. 2015) (rejecting a dormant Commerce Clause

                              49
unambiguously authorizes the agency to take state policies into
account to the extent that such policies affect its statutorily
prescribed area of focus: the justness and reasonableness of
wholesale rates.

V.    Conclusion

       For the forgoing reasons, we conclude that FERC’s
constructive acceptance of the 2021 MOPR was neither
arbitrary nor capricious and was supported by substantial
evidence in the record. We will accordingly deny the petitions
for review.

challenge to a state’s renewable energy mandate). Judge Roth
particularly disapproves of EPSA’s assertion, citing no
relevant authority, that “FERC must therefore play the role of
federal referee for state intrusions into other States’
jurisdiction,” EPSA Br. 42.

                              50