New York State Electric & Gas Corporation v. Federal Energy Regulatory Commission, Independent Power Producers of New York, Inc., Intervenors

117 F.3d 1473, 326 U.S. App. D.C. 123, 1997 U.S. App. LEXIS 17370
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 11, 1997
Docket95-1314
StatusPublished
Cited by10 cases

This text of 117 F.3d 1473 (New York State Electric & Gas Corporation v. Federal Energy Regulatory Commission, Independent Power Producers of New York, Inc., Intervenors) 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
New York State Electric & Gas Corporation v. Federal Energy Regulatory Commission, Independent Power Producers of New York, Inc., Intervenors, 117 F.3d 1473, 326 U.S. App. D.C. 123, 1997 U.S. App. LEXIS 17370 (D.C. Cir. 1997).

Opinion

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

The New York State Electric & Gas Corporation (N.Y.SEG) seeks review of an order of the Federal Energy Regulatory Commission declaring that the rates NYSEG pays for power produced by two qualifying facilities (QFs) do not violate § 210(b) of the Public Utility Regulatory Policies Act of 1978 (PURPA), 16 U.S.C.§ 824a-3(b). Because the challenged order does nothing more, in effect, than announce the position that the Commission might take in an enforcement action before a federal district court, we are without jurisdiction to review it.

I. Background

In February 1995 NYSEG petitioned the Commission for a declaration that the rates it pays for power purchased from Lockport Energy Associates and Saranac Power Partners under agreements approved by the New *1475 York State Public Service Commission (PSC) exceed its avoided cost, in violation of § 210(b) of the PURPA. NYSEG also asked the Commission to modify those rates and to “take any action with respect to its rules, including the revision or waiver of those rules, as necessary to grant the relief requested.” Lockport and Saranac intervened, arguing, among other things, that: the Commission’s power under § 210(h) is limited to ensuring that the PSC properly implemented the Commission’s regulations; the Commission does not have the authority under § 206(a) of the Federal Power Act (FPA), 16 U.S.C. § 824-e(a), to modify the rates; and any revision of the implementing regulations would have to be done through rulemaking, not in the course of an enforcement action.

Finding that the challenged rates were consistent with the PURPA and the relevant regulation, the Commission denied NYSEG’s petition. New York State Electric & Gas Corp., 71 FERC ¶ 61,027 (April 12, 1995). The regulation provides that “[i]n the case in which the rates for purchases are based upon estimates of avoided costs over the specific term of the contract or other legally enforceable obligation, the rates for such purchases do not violate this subpart if the rates for such purchases differ from avoided costs at the time of delivery.” 18 C.F.R. § 292.304(b)(5). The rate contained in each of the challenged agreements was equal to NYSEG’s estimated avoided cost at the time it entered into the agreement. Therefore, the Commission concluded, the rates remain valid under the implementing regulation.

The Commission refused to revise § 292.304(b)(5) on the ground that “[i]t is now far too late in the Commission’s implementation of PURPA for NYSEG to argue, for the first time, that these particular regulations have legal and policy flaws requiring that we abrogate contracts entered into under these regulations.” The agency did, however, take the opportunity to explain the underlying reason for the regulation. The Commission said that it had promulgated § 292.304(b)(5) because it could neither engage in “minute-by-minute” recalculation of rates nor subject utilities and cogenerators to the uncertainty that frequent recalculation would produce. The Commission had been aware that avoided costs would change over time, but had concluded that “in the long run, ‘overestimations’ and ‘underestimations’ will balance out.” The regulation was (and, in the opinion of the Commission, remained) a fair compromise designed “to reconcile the requirement that the rates for purchases equal the utilities’ avoided cost with the need for QFs to be able to enter into contractual commitments based, by necessity, on estimates of future avoided costs.”

The Commission also concluded that it would be inappropriate to bring an enforcement action challenging the accuracy of the PSC’s findings of fact. Under the PURPA, the Commission is required to ensure that each state authority carries out the mandate of § 210(f); it is not, however, for the Commission “to second-guess state regulatory authorities’ actual determinations of avoided cost.” NYSEG, the Commission concluded, should have raised with the PSC, before the contract was approved, any objection it might have had to the method used to calculate its avoided cost.

NYSEG petitioned for rehearing on the grounds that the Commission had erred by: (1) relying upon the PSC’s estimate of avoided cost; (2) failing to relieve NYSEG of payment obligations that violate § 210(b) of the PURPA; and (3) failing to modify, under § 206 of the FPA, purchase rates that violate § 210(b) of the PURPA. When the Commission denied rehearing, New York State Electric & Gas Corp., 72 FERC ¶ 61,067 (July 19, 1995), NYSEG petitioned this court for review.

' II. Analysis

The Commission argues that we are without jurisdiction to review the declaratory order at issue in this case because our doing so would interfere with the enforcement scheme of the PURPA. According to the Commission, our review of its non-binding assessment of the PSC’s compliance with the PURPA would bind the district court in any future enforcement action, thereby usurping that court’s role as the court of first instance in all matters concerning implementation of the statute. The Commission urges that we *1476 hold, as we did in Industrial Cogenerators v. FERC, 47 F.3d 1231 (D.C.Cir.1995), that we are without jurisdiction to act where the effect would be to deprive the district court of its role under the statutory enforcement scheme.

NYSEG counters that we would not disturb the enforcement scheme by reviewing the Commission’s order because the Commission could have granted all of the relief that NYSEG requested without bringing an enforcement action in the district court. For example, the Commission could have modified the challenged agreements under § 206(a) of the FPA without acting under the PURPA. Therefore, according to NYSEG, this court’s review of the Commission’s order would in no way disrupt the enforcement scheme of the PURPA or usurp the district court’s role within that scheme.

The Congress declared with specificity the means by which the ends of the PURPA are to be achieved. See Industrial Cogenerators, 47 F.3d at 1234; Niagara Mohawk Power v. FERC, 117 F.3d 1485, 1488 (1997). The Commission is charged with promulgating regulations designed to encourage cogeneration, 16 U.S.C. § 824a-3(a), which each state regulatory authority must then implement. § 824a-3(f). The Commission may bring an enforcement action in federal district court against any state authority that fails to do so, § 824a-3(h)(2)(A); alternatively, a utility or cogenerator may petition the FERC to bring such an action and, if the agency declines, may itself sue the state regulatory authority in district court. § 824a-3(h)(2)(B).

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117 F.3d 1473, 326 U.S. App. D.C. 123, 1997 U.S. App. LEXIS 17370, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-york-state-electric-gas-corporation-v-federal-energy-regulatory-cadc-1997.