The DC Court, mandates and remands


So we received a decision in a FERC appeal recently that may be of interest to regulatory appeal wonks. Black Oak Energy LLC v. FERC, Docket No. 08-1386

The facts are extremely complicated, but for our purposes, the interesting point is that we got a remand because the Court did not accept FERC's reasoning for making our clients (and others) pay back $37 million that had previously been refunded to them, finding FERC's conduct arbitrary and capricious because the Commission's proffered justification ignored that the refunds had already been distributed. 

In so ruling, the Court of Appeals is giving FERC another opportunity to justify its actions, and isn't vacating the order during the remand.  Whether to vacate during a remand, the Court says, depends on the likelihood that the agency can come up with a viable justification, and on the disruptive consequences of vacatur.  The Court found it "plausible" that FERC could come up with a justification.  Also, in this case, you would get whiplash trying to follow how many times PJM had to keep resettling the market in these long, drawn out FERC proceedings, and the Court didn't want to order another resettlement until the matter is put to rest.  In so ruling, it "emphasize[s] that FERC's opportunity to reconsider is not an invitation to do nothing.  The Commission may not obtain the result it seeks through inaction when it has failed to justify that result with reasoning."

So stay tuned.  We moved to expedite the issuance of the mandate to get things rolling before FERC (in the DC court the mandate doesn't issue for 45 days).  FERC filed an opposition to the motion, saying they had to formally vote on whether to do anything in response to the Court's ruling, and these things take time.  Sigh.

Thanks to ex-PA-ite and now Public Advocate Tim Schneider for taking the laboring oar on this appeal and, among other things, dealing with all the complicated market matters.  It's a loss to us at the firm but a great benefit to all of us in Maine to have someone this bright and hard working at the helm at the OPA.