Grand Council of the Crees v. Federal Energy Regulatory Commission

198 F.3d 950, 339 U.S. App. D.C. 203, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20271, 2000 U.S. App. LEXIS 253, 2000 WL 1997
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 11, 2000
Docket98-1280
StatusPublished
Cited by55 cases

This text of 198 F.3d 950 (Grand Council of the Crees v. Federal Energy Regulatory Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grand Council of the Crees v. Federal Energy Regulatory Commission, 198 F.3d 950, 339 U.S. App. D.C. 203, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20271, 2000 U.S. App. LEXIS 253, 2000 WL 1997 (D.C. Cir. 2000).

Opinion

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

H.Q. Energy Services (U.S.) Inc. (“H.Q. Energy”) is a wholly owned subsidiary of Hydro-Quebec, an electric utility that owns and controls facilities for the generation, transmission and distribution of electric power in Quebec. In November 1997 the Federal Energy Regulatory Commission authorized H.Q. Energy to sell power within the United States at market-based rates rather than under the traditional cost-based rate ceilings. H.Q. Energy Services (U.S.) Inc., 81 FERC ¶ 61,184 (1997) (“Order”). Petitioners, the Grand Council of the Crees (of Quebec) (the “Grand Council” or the “Crees”) and the New England Coalition for Energy Efficiency and the Environment (the “Coalition”), sought rehearing; they argued mainly that H.Q. Energy and Hydro-Quebec had market power in the generation and transmission of electricity in the United States — market power that was insufficiently mitigated to permit the approval. The Commission denied the petition for rehearing, 82 FERC ¶ 61,234 (1998) (“Rehearing Order”), and the Crees and the Coalition petitioned for review here. We dismiss the petitioners’ appeal for want of standing.

Pursuant to § 205(c) of the Federal Power Act (“FPA”), 16 U.S.C. § 824d(c) (1994), a power marketer that seeks to engage in electricity sales under the jurisdiction of the Federal Energy Regulatory Commission must place its rate schedule on file with the Commission. H.Q. Energy requested the Commission to accept for filing a rate schedule authorizing it to sell power at market-based rates.

In reviewing such applications, the Commission demands that the power marketer establish that it, and its affiliates, either do not have, or have adequately mitigated, market power in both generation and transmission. The applicant must also establish that it cannot erect barriers to entry, and that there is no evidence of other behavior perceived as anticompeti-tive, such as affiliate abuse or reciprocal dealing. See H.Q. Energy Services (U.S.) Inc., 79 FERC ¶ 61,152 at 61,651 (1997).

In response to H.Q. Energy’s application, several entities, including the Grand Council and the Coalition, moved to intervene. The Grand Council is a political and governmental entity, representing about 10,000 indigenous people of Northern Quebec. The Coalition is “an association of American consumers, customers, birders, recreational canoeists, energy activists and environmental organizations which has actively intervened in regulatory proceedings in Vermont since 1989.”

The Commission initially addressed the issue of transmission, finding H.Q. Energy’s market power adequately mitigated. 79 FERC at 61,653. Its approach was substantially similar to that which it applies to utilities owning transmission facilities within the United States, namely a requirement that the firm file an open access tariff, with adjustments to account for the different national context. Id. at 61,652. Here it found that H.Q. Energy mitigated adequately by submitting proposed transmission tariffs, to be enforced by Quebec’s regulatory body, the Regie de l’energie, instead of FERC, and with Canadian rather than U.S. commercial law providing the relevant background rules. The Commission also found that H.Q. En *954 ergy satisfied its other requirements for market-based rates except for failing to provide the proper analysis of market power in generation.

H.Q. Energy then made a supplemental filing on generation. The Commission found that the firm’s market shares, in the thirteen United States markets analyzed, would range from 27.8% to 35% of installed capacity, and from 31.8% to 38% of uncommitted capacity. 81 FERC ¶ 61,184 (1997). These figures exceeded those of all applications for market-based rates that the Commission had previously accepted. But the Commission identified three factors that in its view adequately reduced the attendant risks. See id. at 61,810. In light of our holding on standing we need not explore these. In their petition for review, petitioners challenge the Commission’s reasoning, and also allege that the Commission’s failure to prepare an environmental impact statement was contrary to its duty under the National Environmental Policy Act (“NEPA”).

Petitioners have failed to demonstrate standing to raise their claims. Although the claims arise under different statutes— and we address their standing to bring each claim in turn — they nevertheless both rest primarily on an allegation of environmental harm. The Grand Council alleges that the Commission’s license will “devastate the lives, environment, culture and economy of the Crees.” The Crees’ reasoning is that H.Q. Energy’s license to sell power at market-based rates will lead to an increase in Hydro-Quebec’s exports, which will in turn lead to the construction of new hydroelectric facilities, which “will destroy fish and wildlife upon which Cree fishermen, trappers and hunters depend.” The Coalition alleges an environmental harm one step further removed in the causal and geographic chain: many species of migratory birds that are found in New York and New England during parts of the year rely on the habitat of Northern Quebec; these birds, including one species that has been classified as endangered, are threatened by development of hydro-electric projects in that region.

We first consider petitioners’ claims under the FPA. Although there are very serious doubts whether petitioners have satisfied Article III standing, their more straightforward deficiency is in “prudential standing.” Article III standing must be established before any decision is made on the merits. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, -, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (1998). Under the Supreme Court’s recent pronouncement in Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999), however, it is entirely proper to consider whether there is prudential standing while leaving the question of constitutional standing in doubt, as there is no mandated “sequencing of jurisdictional issues.” Id. at 1570 (“It is hardly novel for a federal court to choose among threshold grounds for denying audience to a case on the merits.”). (We return to this issue later, when our reasoning on the substance of prudential standing has been made clear.)

To establish prudential standing, plaintiffs generally must show that “the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute.” Association of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). Because prudential standing is an invention of the courts, Congress has the power to dispense with the requirement by statute. See Bennett v. Spear, 520 U.S. 154, 163, 117 S.Ct.

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Bluebook (online)
198 F.3d 950, 339 U.S. App. D.C. 203, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20271, 2000 U.S. App. LEXIS 253, 2000 WL 1997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grand-council-of-the-crees-v-federal-energy-regulatory-commission-cadc-2000.