Occidental Chemical Corp. v. Louisiana Public Service Commission

810 F.3d 299, 2016 U.S. App. LEXIS 10, 2016 WL 30417
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 4, 2016
Docket15-30100
StatusPublished
Cited by12 cases

This text of 810 F.3d 299 (Occidental Chemical Corp. v. Louisiana Public Service Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Occidental Chemical Corp. v. Louisiana Public Service Commission, 810 F.3d 299, 2016 U.S. App. LEXIS 10, 2016 WL 30417 (5th Cir. 2016).

Opinion

W. EUGENE DAVIS, Circuit Judge:

The question presented in this appeal is whether the district court abused its discretion when it entered an order indefinitely staying this proceeding to allow the Federal Energy Regulatory Com *302 mission (“FERC”) to act on an administrative complaint filed by Plaintiff-Appellant Occidental Chemical Corporation (“Occidental”) against a non-party to this action, which largely concerns the same issues. The district court based its order on the primary jurisdiction doctrine, which is essentially a form of abstention. Under this doctrine, a district court with subject matter jurisdiction may, under appropriate circumstances, defer to another forum, such as an administrative agency,, which also has non-exclusive jurisdiction, based on its determination that the benefits of obtaining aid from that other forum outweigh the need for expeditious litigation. 1 Occidental essentially argues that the indefinite nature of the stay outweighs any potential benefit. For the reasons set forth, we agree.

I. Background

The dispute arises under the Public Utility Regulatory Policies Act of 1978, Pub.L. No. 95-617, 92 Stat. 3117 (“PURPA”), which was originally passed in 1978 and was “designed to combat the nationwide energy crisis.” 2 The Supreme Court has explained the relevant statute, § 210, as follows:

Section 210 of PURPA’s Title II, 92 Stat. 3144, 16 U.S.C. § 824a-3, seeks to encourage the development of cogeneration and small power production facilities. Congress believed that increased use of these sources of energy would reduce the demand for traditional fossil fuels. But it also felt that two problems impeded the development of nontraditional generating facilities: (1) traditional electricity utilities were reluctant to purchase power from, and to sell power to, the nontraditional facilities, and (2) the regulation of these alternative energy sources by state and federal utility authorities imposed financial burdens upon the nontraditional facilities and thus discouraged their development.
In order to overcome the first of these perceived problems, § 210(a) directs FERC, in consultation with state regulatory authorities, to promulgate “such rules as it determines necessary to encourage cogeneration and small power production,” including rules requiring utilities to offer to sell electricity to, and purchase electricity from, qualifying co-generation and small power production facilities. Section 210(f), 16 U.S.C. § 824a-3(f), requires each state regulatory authority and nonregulated utility to implement FERC’s rules. And § 210(h), 16 U.S.C. § 824a-3(h), authorizes FERC to enforce this requirement in federal court against any state authority or nonregulated utility; if FERC fails to act after request, any qualifying utility may bring suit.
To solve the second problem perceived by Congress, § 210(e), 16 U.S.C. § 824a-3(e), directs FERC to prescribe rules exempting the favored cogeneration and small power facilities from certain state and federal laws governing electricity utilities.
Pursuant to this statutory authorization, FERC has adopted regulations relating to purchases and sales of electricity to and from cogeneration and small power facilities. See 18 CFR pt. 292 (1980); 45 Fed.Reg. 12214-12237 (1980). These afford state regulatory authorities and no-nregulated utilities latitude in determining the manner in which the regulations are to be implemented. Thus, a state *303 commission may comply with the statutory requirements by issuing regulations, by resolving disputes on a case-by-case basis, or by taking any other action reasonably designed to give effect to FERC’s rules. 3

Occidental owns and operates a “qualifying facility” (“QF”) under § 210, the so-called Taft Facility, located in Hahnville, Louisiana. Its traditional host utility is Defendant-Appellee Entergy Louisiana, LLC (“Entergy”), as well as other utilities regulated by Defendant-Appellee the Louisiana Public Service Commission (“LPSC”). Occidental claims that, under § 210(f)(1) of PURPA, 16 U.S.C. § 824a-3(f)(1), it has, among other rights, a right to compel Entergy to purchase the energy it produces, a right to effect such sales either through unscheduled “puts” of energy or through legally enforceable obligations, and a right to receive the appropriate rate for such sales.

Occidental claims that Entergy, to avoid its obligations to Occidental and other QFs under PURPA, decided in 2011 to join the Midcontinent Independent Transmission System Operator, Inc. (“MISO”), a regional transmission organization. Occidental also claims that Entergy and MISO planned to integrate QFs, including the Taft Facility, into MISO, resulting in the QFs being wrongfully stripped of many PURPA rights.

On January 17, 2013, Occidental commenced an administrative action against MISO before FERC, in FERC Docket No. EL13-41-000, pursuant to the Federal Power Act, 16 U.S.C. §§ 824e and 825e (the “Integration Complaint”). Essentially, Occidental wants: (1) FERC to declare that MISO’s plan to integrate QFs was invalid, and (2) FERC to order MISO to allow QFs to register for and participate in its markets without forgoing their PURPA rights. Resolving the Integration Complaint apparently will require FERC to determine how FERC’s regulations applicable to QF transactions apply to the MISO marketplace, including the integration of QFs under the MISO tariff.

Although Occidental sought fast-track processing of the Integration Complaint, very little has happened in that proceeding. Briefing was completed in March 2013, and on March 6, 2014, FERC sent Occidental a letter ordering it to supplement the record with two pieces of information: “(a) Whether Occidental has registered as a market participant in MISO and, if so, how Occidental has participated as a market participant; and (b) Updates to Occidental’s complaint to reflect experience regarding the treatment of its QF under MISO’s Tariff, along with any supporting documents.” Occidental did so on April 7, 2014, and other parties responded, but FERC has taken no further action to date.

In the meantime, on January 9, 2014, the LPSC entered an order granting an application by two Entergy entities.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
810 F.3d 299, 2016 U.S. App. LEXIS 10, 2016 WL 30417, Counsel Stack Legal Research, https://law.counselstack.com/opinion/occidental-chemical-corp-v-louisiana-public-service-commission-ca5-2016.