Ninth Circuit won’t revisit FERC findings against California energy firms in 2000

A three-judge panel for the U.S. Court of Appeals for the Ninth Circuit has declined to reopen litigation surrounding certain companies who did business in California and were cited by the Federal Energy Regulatory Commission (FERC) for tariff violations back in 2000.

The appeals court panel ruled Sept. 8 that FERC did not arbitrarily and capriciously determine that certain energy companies committed tariff violations in California during the summer of 2000.

The case is part of a long-standing series of decisions arising out of California’s energy crisis in 2000 and 2001.

After the California market was deregulated, California created two non-profit entities: the California Power Exchange Corp. (CalPX) and the California Independent System Operator Corp. (Cal-ISO).

Both entities were subject to FERC jurisdiction, with CalPX operating pursuant to a FERC-approved tariff and wholesale rate schedule. The tariff incorporated a protocol, the Market Monitoring and Information Protocol, which set forth rules for identifying and protecting against abuses of market power, the court noted.

The panel held that FERC’s determination – that electric sellers Shell Energy North America, LP, MPS Merchant Services, Inc., and Illinova Corp. violated the Cal-ISO tariff and Market Monitoring and Information Protocol – was not arbitrary, capricious, or an abuse of discretion.

Specifically, the panel held that FERC reasonably interpreted the Cal-ISO tariff and Market Monitoring and Information Protocol to prohibit the practices of false export, false load scheduling and types of scheduling and types of anomalous bidding.

The panel further held that FERC reasonably concluded that the sellers engaged during the Summer Period (the period from May 1, 2000, to Oct. 1, 2000) in the practices deemed tariff violations by the orders on review.

The panel held that because FERC’s remedial order is not final, the panel lacked appellate jurisdiction over it.

The case had been argued in San Francisco on Aug. 1.

The case was heard by Sidney R. Thomas, Chief Judge, and M. Margaret McKeown and Richard R. Clifton, Circuit Judges.

The case is No. 15-73803.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.