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Western Area Power Administration v. Federal Energy Regulatory Commission

The D.C. Circuit upheld an order of the Federal Energy Regulatory Commission reorganizing the electronic transmission grid in the State of California, which resulted in the subsequent imposition of administrative fees by the California Independent Systems Operator and the pass-through of those fees by Pacific Gas and Electric to its customers. The court held that one petition challenging the order was untimely and that, with respect to the second petition, the commission did not act arbitrarily or capriciously in its approval of the fees or the pass-through.

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Argued February 26, 2008

Before: RANDOLPH and GARLAND, Circuit Judges, and EDWARDS, Senior Circuit Judge.

This case arises from the reorganization of the electric transmission grid in the state of California, the subsequent imposition of administrative fees by the California Independent Systems Operator (“ISO”), and the pass-through of those fees by Pacific Gas and Electric (“PG&E”) to its customers. The decision of the Federal Energy Regulatory Commission (“FERC” or “Commission”) to approve the fees and pass-through has been challenged by several large customers of PG&E — the Western Area Power Administration, Northern California Power Agency, Sacramento Municipal Utility District (“SMUD”), City of Santa Clara, and Modesto Irrigation District (together “Existing Customers”) — as well as the Cogeneration Association of California and the Energy Producers and Users Coalition (together “CoGen”). The petitioners argue that the Commission acted arbitrarily and capriciously in approving fees that violated FERC cost-causation principles and imposed new fees for existing services, in violation of the Mobile-Sierra doctrine.

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