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California Power Exch. Corp. v. Federal Energy Regulatory Comm'n

ELR Citation: 31 ELR 20560
Nos. Nos. 00-71701, 01-70031, 245 F.3d 1110/(9th Cir., 04/11/2001)

The court denies a California public utility's petition for a writ of mandamus staying various aspects of a Federal Energy Regulatory Commission (FERC) order addressing the crisis surrounding California's restructuring of its electricity market, and denies a city's petition for mandamus ordering FERC to take action on requests for retroactive refunds from wholesale electricity sellers. The utility, which operates an auction for trading electricity, sought to stay FERC's termination of its wholesale tariff and rate schedules. The court first holds that while FERC's action was perhaps unprecedented. FERC does not lack authority under §206 of the Federal Power Act (FPA) to address the structural flaws of a market-based rate regime through the termination of a public utility's wholesale tariff and rate schedules. The language of FPA §206 is sufficiently broad to permit FERC to eliminate a tariff or rate schedule entirely, particularly in the context of a market-based rate regime, if, as here, it also establishes rules, regulations, or practices that will result in just and reasonable rates. In addition, the court holds that the utility failed to demonstrate a clear and certain claim that FERC's prohibition on investor-owned utilities from selling all but their surplus generation into wholesale markets is arbitrary or unduly discriminatory. Likewise, the court holds that FERC's imposition of an interim $150 per megawatt hour "breakpoint" in the utility's core markets is neither arbitrary nor discriminatory. The breakpoint is not a cap but instead provides that transactions above the breakpoint price will not set the single market clearing price and would be subject to additional reporting requirements.

The court also denies a city's petition for a writ ordering FERC to come to a decision as to wholesale electricity sellers' refund liability. FERC's delay on taking action on requests for retroactive refunds from wholesale electricity sellers is not so unreasonable as to render the city's remedy—to await a final order—inadequate. FERC's decision to give higher priority to structural remedies over retroactive refund determinations does not in any way entitle the city to the mandamus relief it requests.

Counsel for Petitioner
Carmen L. Gentile
Bruder, Gentile & Marcoux
1100 New York Ave. NW, Ste. 510 E., Washington DC 20005
(202) 783-1350

Counsel for Respondent
Dennis Lane
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 208-0200

O'Scannlain, J. Before Kleinfeld and Tallman, JJ.