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Case number 16-1003, Next Era Desert Center Blythe LLC Petitioner versus Federal Energy Repertory Commission.

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Mr. Estes for the petitioner, Ms.

[00:00:11] Speaker 00:
Rylander for the respondent, and Mr. Weaver for the interveners.

[00:00:53] Speaker 02:
Mr. Estes, good morning.

[00:00:55] Speaker 06:
May it please the Court, good morning.

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I'd like to reserve five minutes for rebuttal.

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The issue here to state it as we put it in our reply brief

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is whether there are one or two roads to what I call Rome on Reply to getting congestion revenue rights.

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Is the only road, the one FERC staked out, claiming the agreement, the interconnection agreement, clearly and unambiguously limited next year only to the process set forth in the agreement?

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Or is there, in fact, another road which the tariff provides?

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This is no – and there are three possible ways to come out on that.

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You could affirm FERC saying, well, the agreement unambiguously has that effect.

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That would mean affirmance.

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We say that the tariff and the agreement taken together unambiguously show there are two roads.

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In which case, you vacate and remand for them to consider the merits of our complaint.

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Third, you could find this is ambiguous, in which case you would remand Ferck's brief foray into testing the waters of ambiguities I will explain shortly doesn't work.

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And this is no trifling matter, because if we're right, FERC has engaged in a logical fallacy that dates back thousands of years to the Stoics, in which this court, at least three times, has discussed denying the antecedent.

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And Judge Taito, you'll remember in two decisions, net gavi ferc, which we wronged.

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I'm having trouble getting my mind around FERC being thousands of years old.

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Go ahead.

[00:02:24] Speaker 06:
Well, logic lives on for generations.

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Yes, I got you.

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OK, but go ahead with your, what did I say?

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Judge Henderson will remember her dissent too in the Florida banker's case.

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Here's how they are violating that logical condition.

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Classically, this is stated, if I behead the king, the king is dead.

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If I do not behead the king, the king lives.

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But we know there are lots of ways the king can die other than beheading.

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That's what FERC is doing here, and that's what I plan to demonstrate to you today.

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They're saying, well, if you have what are called capital N network, capital U upgrades under the contract, you can get congestion revenue rights.

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under the terms of that agreement.

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But if you don't have network upgrades, as that term is defined, you can't get them.

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That's the only road to Rome.

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Now, there are several fatal problems with that.

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And actually, the briefs speak loudly to the first one.

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None of the parties to the interconnection agreement agree with FERC.

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Below and before this court, the intervenors say, well, there are two roads.

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You could use the agreement, but you've given that up.

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Or you could use the tariff, except you don't qualify because there are preconditions you don't meet, an issue FERC found irrelevant and refused to address.

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We agree with the interveners to that extent.

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We disagree on whether we met the tariff restriction.

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But FERC stands alone, announcing out of the blue in its first order, well, the contract disposes of everything.

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An issue, by the way, I think, that if Edison in particular, who vigorously opposed our complaint, had thought was right, they would have fired that bullet in their opposition to the complaint.

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They would have said, you're dead on arrival because of the agreement.

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Let's look at what FERC says about the agreement.

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You can think about two basic dimensions of it.

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First, they seem to be looking at what's not in the agreement.

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And we say, well, one thing that's not anywhere in the agreement is any express statement that says, Section 3611 doesn't apply.

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You can't use the tariff door.

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It's closed.

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We do know the agreement specifically says these aren't network upgrades, so you can't get refunds, which means under 11.4 of that agreement, yes, you can't, for network upgrades, get congestion revenue rights.

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But that just highlights the absence of an express waiver of the tariff right.

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And what FERC really seems to be saying, at least some of the times, and if you look at... You don't take issue with the notion that under the agreement, there's no ability to get the CRRs.

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Your claim is that you can nonetheless get them under the tariff.

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That is absolutely right.

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So I guess my question is, just as a functional matter, what would be the purpose of the parties reaching an accord that says there's no CRRs available under the agreement, but there nonetheless is another way for you to get the very same thing?

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Because we have to look what the background rules are, Your Honor.

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Is there any – if you're silent on the status of the tariff – this was actually where I was going next – what does that mean?

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Mind you, by the way, when Edison filed the amended agreement that contained this language in 2013, they represented DeFerque and everybody, actually, that there were no other beneficiaries.

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other than Desert Center, which would mean there were no congestion revenue rights.

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So one reason for absence might be people didn't have this front of mind.

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But who wins, if that's the case?

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Who wins because of silence?

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And I would submit to you it has to be Next Era, because the tariff right, by the way, this is not just some regular tariff right.

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This tariff right was mandated by a FERC rule.

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So I guess I'm asking a little bit of a different question, because I get your argument.

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that if you mesh together all the terms of everything it turns out actually we still have an entitlement to get CRRs under the under the tariff directly under the tariff rather than going through the agreement which everybody agrees was relinquished and you may or may not be right about that that you know you get the benefit of this I'm just asking as a functional matter why would somebody want that result

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Why does that result make sense that you end up getting CRRs via the tariff, even if the nub of the agreement was that you can't get them under the agreement?

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Why does that result make sense?

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I see.

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Well, let's look at it this way.

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Nobody disputes the fact that these facilities at least were intended to be interim.

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And the agreement states and the interveners argue forcefully that these can't be network upgrades because they're temporary and that's not something you would ever get refunds for.

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And mind you, the agreement talks about giving up refunds.

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It doesn't actually talk about giving up the alternative expressly.

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But you agree that it was given up under the agreement, so we're past that.

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That's right, except that CRRs are a different creature.

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And under the Commission's regulation, which the Commission ignores, they are specifically allowed for temporary facilities.

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36.11.1 says you can have them for the predetermined life of the resource.

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And that makes a lot of sense, Your Honor, because if it turns out that you have system benefits that

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next era paid for, and this is in fact what's happened, that by rules should be next eras because of a grant of these rights, then you've got a vehicle that is a different one than what the tariff would give.

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But that's true under the agreement too.

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This is what I don't understand about this.

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You may be right.

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You may or may not be right that because of the way this transpired, you still have an entitlement under the tariff as a legal matter.

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I'm just trying to understand as a matter of background, just common sense about the world.

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It's also true under the agreement

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that you know you could say that look some of the stuff we're doing it might be seen as interim but it actually turns out to benefit the system long term and therefore we ought to get our money back for it and that's true that could happen and that could be a network upgrade and you could have and you could have said well even if it's not we want to get a CRR instead of getting reimbursed that's all true under the agreement but the parties dispense with that under the agreement with a mechanism for you to get reimbursed for things that benefit the system long term my question is

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If the CRRs are gone under the agreement, why does it make sense to have them still be available under the tariff?

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Why would anybody design a system that brought about that result?

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Why does that make sense?

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I think – well, there are several answers, and forgive me, Your Honor, if I'm not quite pinning down your question, but let me try now.

[00:09:05] Speaker 07:
Sure, please.

[00:09:07] Speaker 06:
First of all, it may be that no one has, as I said, front of mind CRRs at all.

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The mechanism in- I'm sorry, that no one what?

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Had in the front of their mind.

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Oh, that no one had it in mind when they drafted the- It may be.

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We didn't have a hearing.

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We don't actually know.

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But we know that we have a representation that would not exist.

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We had a bargain for a right in the instance of the interim facilities becoming permanent.

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And I would submit to you that this could make sense for several reasons.

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First of all,

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If next year it wins in this litigation, it's lost a right it bargained for under the contract, because you cannot have CRRs in refunds.

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So it bargained for a possible remedy that it will leave unstruck, if you will.

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And the fact that it got something immediately.

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If you're right, if you win, it will still get its CRRs under the tariff.

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That's right.

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So it's not leaving anything behind.

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Well, we've said to begin with at the outset that we would have disabled ourselves from seeking to get permanent CRRs or refunds, permanent refunds, excuse me, under the agreement if the interim facilities become permanent.

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And there would never be a double recovery.

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And what we have here is a statutory, a regulatory right that actually was commanded by statute.

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This is the highest order of regulatory commandment, because the rule

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that resulted in 3611, Congress directed FERC to enact within 180 days of passage of the Energy Policy Act of 2005.

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So turning everything around, how could it be that silence somehow trumps a statutory command, embodying a regulation?

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And how can it be that FERC says this whole question is irrelevant and we don't even have to look?

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At the nature of one, I'll just try one more time.

[00:10:56] Speaker 05:
Sorry, I'll try and get the question.

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So no, I'll give it a rest after one more time, which is this.

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Suppose the parties actually had realized that this issue were on the horizon when they're negotiating the agreement and then the addendum.

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Suppose that they realize there's a question about CRRs.

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Why would the parties then, assuming that they had realized it, I take your point that maybe nobody even thought about this, so it kind of leaves this lacuna, but let's just suppose they actually forecast this very problem.

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Why would they have then achieved a result under which there's no availability of CRRs under the agreement, but there's still availability of CRRs under the tariff?

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Well, if there's no default rule that says that the agreement has to be the sum collection of all rights, then you could think, we'll have it out under the tariff if the unlikely event happens and there are CRRs.

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And maybe Edison thought, yeah, I mean, they apparently thought that route was available.

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We don't think they can score a touchdown there.

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And so they would have just potentially left that.

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They potentially left it out.

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who wins with silence.

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And so they may have just figured we'll address that down the road.

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Now, Your Honor, since there was no trial here, we didn't have exploration of the facts.

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I have a record that's limited.

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So I look back at the law and go,

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You know, in the event of silence, what happens here, we have no absolute clear statement in the agreement itself that says that the result you're exploring, you can never get CRRs.

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And so first reasoning from silence, we have a clear statement in the regulation that says if you pay, you get these rights unless you're otherwise paid.

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giving up the right of refunds is actually sort of a precondition to getting these revenue rights to begin with, because you can't have both.

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So surrendering the refunds is, in some ways, putting you in the batter's box of getting the congestion revenue rights.

[00:12:53] Speaker 02:
Let me ask you, because I've looked at this agreement in a different way.

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I've looked at it from

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next era facing the possibility that it wasn't going to be ready in time.

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And it was after immediate deliverability.

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And the CRRs, the refunds, the network upgrades were all down the road.

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They wanted this interim project in place so they could deliver the electricity.

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They got a huge benefit.

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I mean, the fact that they may not get refunds or CRRs if any of the interim project is not made permanent.

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I don't see why we should

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be weeping for them when they got what they bargained for, which was that immediate deliverability.

[00:13:43] Speaker 06:
Well, Your Honor, I would respectfully submit that that skips the question, which is whether they had to bargain for all possible roads to Rome to go through the interconnection agreement.

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And I would also submit to you that

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FERC has a landmark statement by rule about system benefits.

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And let's bear down on what these system benefits actually are.

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If Nextera had not built or not funded the interim facilities, energy prices would be higher than they are now.

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So there are system benefits that are created by this investment and by rule.

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That means Nextera is eligible for these revenue rights.

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If they don't get the revenue rights, then actually there's a windfall.

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But it's a windfall not in Nextera's pocket.

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It's a windfall to customers who paid not one cent for the facilities and who are now reaping the benefits from lower prices that should go by rule to Nextera.

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Now, we could have had a debate at FERC about whether I'm right, about what this regulation says, and whether the interveners are right, that we don't meet the preconditions.

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I would submit to you that FERC, in trying to say this is clear, hasn't pointed to anything in the agreement that actually is clear.

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Their explanations don't really make any sense.

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Everything they point to is in the context of capital N network capital U upgrades.

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And so I don't think they can reach the result that they look for here, which actually cuts off questions about sort of why we might be here.

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They've got a burden to carry.

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They've chosen the highest burden they can.

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This is clear.

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We submit to you they haven't shown that.

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They still haven't explained in any fashion you can follow how it is that the contract

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not even looking at the tariff, clearly disposes of these issues.

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And so we would submit that the second or third option must obtain here, that either you vacate and remand or you remand because they've not offered a path to find clarity that I think you can follow or that politicans can even discern.

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Can I ask this, though, is the upshot of your position is that

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There's no ability to get CRRs as an interconnection customer, but there is an ability to get CRRs as a project sponsor.

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That's the upshot of your position, right?

[00:16:20] Speaker 06:
That's right.

[00:16:21] Speaker 05:
Yeah.

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And although we're talking about getting CRRs with respect to the very same work that's being done by Nextera, you can't get it as an interconnection customer, but you can get it as a project sponsor.

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That's right.

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And there's no conflict with that.

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That's a question of how the different regimes work.

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And what would the contrary rule mean?

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Would it mean that if you're an interconnection customer, you alone, among the universe of possible funders, are disabled from getting CRRs under the tariff?

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We argued that was unjust and unreasonable and unduly discriminatory.

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We were ignored.

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That sells grounds for a remand.

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Does it mean that the network upgrade category eats the entire rule because everything's a network upgrade, and so maybe you can only go through an interconnection agreement?

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Nobody else can use the tariff.

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We don't have answers to any of these questions because FERC hasn't, are they relying on silence?

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Are they saying network upgrades is some vast universe that covers everything?

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I would submit to you, I shouldn't have to sit here and speculate, and neither should you wonder what the answer to those questions are.

[00:17:26] Speaker 06:
I don't think we'll hear anything, Coach, in a little bit.

[00:17:28] Speaker 03:
You know what, your basic position is, your basic position is

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Look, there's nothing in the agreement that precludes obtaining CRRs under the tariff, right?

[00:17:38] Speaker 03:
That's what the plain language says.

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And you don't want us to sit around worrying about, well, why would the parties have done that?

[00:17:45] Speaker 03:
What sense does it make?

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Your point is, well, this is what it says, right?

[00:17:50] Speaker 06:
Yes, but your questions are your questions.

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So I recognize that.

[00:17:55] Speaker 03:
That's the way I viewed your case.

[00:17:57] Speaker 03:
You viewed your case that way, that contrary to what Ferck said, the interconnection, the agreement does not preclude obtaining CRRs under 3611 of the tariff.

[00:18:09] Speaker 03:
That's correct.

[00:18:10] Speaker 03:
And as far as you're concerned, that ends the case for this court, right?

[00:18:15] Speaker 06:
Yes, that is our main argument.

[00:18:17] Speaker 03:
Even if it doesn't make any sense at all that your client would obtain the same CRRs under the tariff that it couldn't obtain under the agreement, right?

[00:18:33] Speaker 06:
Yes, though I don't agree with the premise of your question, because I think it can make sense, but I think it's not.

[00:18:38] Speaker 06:
Say once again why it makes sense.

[00:18:41] Speaker 03:
I know you don't think we need to think about that, right?

[00:18:43] Speaker 06:
It makes sense, Your Honor, because these are two separate regimes awarding two different kinds – if you're electing CRRs in lieu of refunds, you're doing that

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as the agreement says, because these are installations that are permanent, that can roll on through time.

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And in our situation, CRRs are a different instrument.

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Refunds are like traditional regulatory cost of service recovery.

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CRRs are something that can be awarded for a slice of time, because they model benefits to the system

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over defined periods of time as you move through time.

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So it's a different product.

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The tariff allows this.

[00:19:27] Speaker 05:
Could you not have preserved your ability to get CRRs under the agreement?

[00:19:31] Speaker 06:
We could have, but so too could the counterparties have said, you can't get them under the law.

[00:19:36] Speaker 05:
I understand that.

[00:19:36] Speaker 05:
It's just that if CRRs, I completely understand Judge Tatel's point, which is sometimes courts are in a position of doing things that might not, at first blush, appear to be commonsensical.

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It's just the best possible state of the world is when courts do things

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because there is a common sense behind it.

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And I'm just trying to get at whether we're in that land or are we in the land where we're achieving a result where the common sense isn't manifestly apparent.

[00:20:01] Speaker 05:
And what I don't understand about the argument you just made is that it's true that CRRs are different.

[00:20:06] Speaker 05:
They are, but there's nothing that precluded CRRs from being available under the agreement.

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And the question is, if that's gone, why does it make sense to have them still be available under the tariff?

[00:20:18] Speaker 06:
And maybe this isn't satisfying any of you as a practical reason why this makes sense.

[00:20:25] Speaker 06:
But if you have a freestanding tariff and, in fact, regulatory right to a road that leads to Rome, silence in the contract doesn't give that up.

[00:20:38] Speaker 06:
And at least, I would say, Your Honors,

[00:20:43] Speaker 06:
You don't have a basis presented to you by the orders, which are cryptic at best, to say this is clear.

[00:20:50] Speaker 06:
It's not clear.

[00:20:52] Speaker 06:
I think it's clear our way.

[00:20:53] Speaker 06:
But at a minimum, it's not clear Ferck's way.

[00:20:55] Speaker 03:
Let me try to ask the question a different way.

[00:20:58] Speaker 03:
Maybe I'll try and answer it differently.

[00:20:59] Speaker 03:
Maybe it's the same way, but OK.

[00:21:01] Speaker 03:
So as I understand your position, is when the parties, when anybody sits down to draft an agreement like this, everybody knows about the tariff, right?

[00:21:11] Speaker 03:
The tariff is like the Constitution.

[00:21:13] Speaker 03:
3611, it's basic law, correct?

[00:21:17] Speaker 06:
Yes.

[00:21:17] Speaker 03:
OK.

[00:21:18] Speaker 03:
So let's just assume that everybody sitting around the table knows that the tariff provided one option for your client to get CRRs, right?

[00:21:33] Speaker 03:
So why would they have drafted an agreement that bars them from receiving CRRs in this particular way, that is, instead of cash for network upgrades?

[00:21:46] Speaker 06:
without observing this other route?

[00:21:49] Speaker 03:
No, no, no.

[00:21:50] Speaker 03:
Why would they have drafted it?

[00:21:51] Speaker 03:
They know that the next era can get CRRs under the tariff.

[00:21:57] Speaker 03:
So why would they have put in the agreement that they can't get CRRs in lieu of refunds for network upgrades?

[00:22:04] Speaker 06:
Well, what the agreement says is these aren't network upgrades, which takes you out of the agreement entirely, and you can't get refunds.

[00:22:13] Speaker 06:
It's a tag-along that's added logically by FERC to say you can't get CRRs.

[00:22:18] Speaker 06:
And the reason refunds were given up goes back to what I started with.

[00:22:21] Speaker 06:
Refunds are this long-tenored sort of utility style, give back a return of and on your investment.

[00:22:27] Speaker 06:
And CRRs can be a brief snapshot in time, so they're different things.

[00:22:34] Speaker 06:
But I like your reference to the Constitution, because we went over that when we were preparing for this argument.

[00:22:39] Speaker 06:
Is there – what else does Next Era have to list in the agreement to preserve?

[00:22:43] Speaker 06:
Do they have to list the Constitution?

[00:22:45] Speaker 06:
Do they have to list everything in the tariff?

[00:22:47] Speaker 06:
Do they have to list the Federal Power Act?

[00:22:49] Speaker 06:
What rights are they waiving, despite FERC's rule against express waiver, by not maintaining them in the agreement?

[00:22:55] Speaker 06:
And how can FERC defend that in the absence of any language in the agreement expressly

[00:23:02] Speaker 06:
effectuating that result when they refused even to open the book on what the regulation or the tariff route says.

[00:23:11] Speaker 06:
They've looked at half the playing field and concluded somehow, because there's some sort of default rule they're not even able to articulate, is it some

[00:23:20] Speaker 06:
broad definition of democratic upgrades is that silence means we win.

[00:23:24] Speaker 06:
They've never said silence means you win.

[00:23:26] Speaker 06:
They've never said the interconnection agreement has to be the sole gathering of everything.

[00:23:31] Speaker 06:
There's no rule like that or no order like that.

[00:23:33] Speaker 06:
That's not in the regulation.

[00:23:34] Speaker 06:
It's not in the agreement.

[00:23:35] Speaker 06:
In fact, Fert on brief talked about 3.3 of the agreement, but totally got it wrong.

[00:23:41] Speaker 06:
That agreement, that provision says, if you're dealing with something between CAISO and Next Era,

[00:23:48] Speaker 06:
And there's a conflict between the tariff and the interconnection agreement that tariff controls.

[00:23:53] Speaker 06:
So by those lights, in the event of some lack of complete symmetry, it's the tariff right that has to win.

[00:24:03] Speaker 02:
Let me ask you this.

[00:24:04] Speaker 02:
Why did you enter into the agreement?

[00:24:07] Speaker 06:
My client entered into the agreement because it was concerned that the permanent West of Devers upgrades, which are a billion plus dollars.

[00:24:17] Speaker 02:
You wanted the deliverability, isn't that right?

[00:24:19] Speaker 02:
That's what I've been reading.

[00:24:21] Speaker 06:
Yes, that's correct.

[00:24:22] Speaker 06:
There was a best efforts obligation, this isn't in the record, to try and get deliverability for the first contract to PGA.

[00:24:30] Speaker 02:
That's what you had to have, right?

[00:24:32] Speaker 02:
Otherwise, why enter into the agreement?

[00:24:36] Speaker 02:
And I ask again that the giving up, if your position is correct, the giving up of CRRs under the agreement meant absolutely nothing if you could get them under the tariff.

[00:24:49] Speaker 02:
And what you got from the agreement is exactly what you wanted, which was the immediate deliverability.

[00:24:54] Speaker 06:
Well, we also, yes, Your Honor, but we also paid for the interim upgrades and we delivered solar power, you know, on time to California.

[00:25:04] Speaker 02:
And you had the chance at the end that the interim might become permanent and you would get

[00:25:10] Speaker 02:
And the CRRs are the refunds.

[00:25:12] Speaker 06:
And we gave up refunds, which was a requirement.

[00:25:16] Speaker 06:
And giving up CRRs through the tariff was never a bargain for provision of that agreement, or it would be expressed.

[00:25:23] Speaker 06:
I mean, I did try this before.

[00:25:25] Speaker 06:
You could turn the same shoe on the other foot and say, why didn't the counterparties insist that we give this up?

[00:25:32] Speaker 06:
And if I'm right, and in the absence of anything clear, the tariff prevails.

[00:25:37] Speaker 06:
At a minimum, FERC has it clearly set forth why that would be the case.

[00:25:41] Speaker 06:
I see my time has long passed, but so I'd love to keep trying to answer your questions as best I can, but.

[00:25:48] Speaker 02:
We'll give you a couple minutes to reply.

[00:25:49] Speaker 02:
Thank you.

[00:25:51] Speaker 02:
Ms.

[00:25:51] Speaker 02:
Freylander.

[00:26:02] Speaker 01:
Good morning.

[00:26:03] Speaker 01:
May I please record Elizabeth Freylander for the Federal Energy Regulatory Commission.

[00:26:08] Speaker 01:
I'd like to pick up where the court left off with the fact that Next Era, as the court seems to understand, Next Era argues that there's more than one road to Rome here, that it has more than one path to obtain congestion revenue rights.

[00:26:24] Speaker 01:
But as is apparent from both the letter order and the interconnection agreement, and as the Commission found in both orders,

[00:26:32] Speaker 01:
Next Era is participating in these agreements as an interconnection customer.

[00:26:38] Speaker 01:
And as you mentioned, Judge Henderson, a couple of times, they did this for purposes of obtaining immediate deliverability.

[00:26:46] Speaker 03:
Can you, before you talk about purpose, could you just help me with the language?

[00:26:53] Speaker 03:
Why is it next year completely correct, at least about the language of the agreement?

[00:26:58] Speaker 03:
Basically what it says is that the interconnection customer may obtain CROs in lieu, it doesn't say only in lieu, it says in lieu of refunds.

[00:27:19] Speaker 03:
So the only thing it says is that

[00:27:21] Speaker 03:
is that they can't get both.

[00:27:23] Speaker 03:
It doesn't say anything about 3611.

[00:27:26] Speaker 01:
No, Your Honor, it does not reference 3611.

[00:27:29] Speaker 03:
Right.

[00:27:30] Speaker 03:
But aren't I right about the way, if you just look at the agreement, the agreement does not clearly preclude, as FERC says in its decision, obtaining CRRs at all.

[00:27:44] Speaker 03:
It just says they can't get them, this is the only way they can get them under the agreement, in lieu of payments.

[00:27:50] Speaker 01:
Yes, Your Honor.

[00:27:51] Speaker 03:
Right, okay.

[00:27:52] Speaker 03:
So now, where do you go from there?

[00:27:54] Speaker 01:
Where I go from there.

[00:27:55] Speaker 03:
If that's true, then don't we... I mean, you know, our obligation is to look at the language.

[00:28:01] Speaker 03:
Ferck says the language is clear.

[00:28:04] Speaker 03:
You've disagreed with me that it's not.

[00:28:07] Speaker 03:
Doesn't that end this case?

[00:28:10] Speaker 01:
No, Your Honor.

[00:28:11] Speaker 01:
The critical distinction here, and one that NextEra is trying to obscure, is that interconnection and transmission are separate processes.

[00:28:19] Speaker 01:
They are traveling the road of an interconnection customer, and they're building not even a piece of the transmission grid, but rather a patch to it in order to obtain that immediate deliverability.

[00:28:31] Speaker 01:
The other way, as the court knows from South Carolina and related cases, is that when one builds transmission, that is a longer process that involves assessing the needs of the entire grid from the top down.

[00:28:42] Speaker 03:
That's 3611, right?

[00:28:44] Speaker 03:
That's obtaining it under 3611.

[00:28:46] Speaker 01:
That's correct, Your Honor.

[00:28:46] Speaker 03:
But that's not what the FERC order says.

[00:28:48] Speaker 03:
The FERC order simply says it doesn't deal with 3611.

[00:28:55] Speaker 03:
It says 3611 is not relevant, because the agreement is clear.

[00:29:01] Speaker 03:
And from our perspective, that is, of a reviewing court, that's wrong.

[00:29:06] Speaker 03:
Now, FERC could have gone on and said, OK, 36, under the agreement, the in lieu of is in lieu of repayments.

[00:29:17] Speaker 03:
But there is this other option, 3611, but they're not eligible for it for the following reasons.

[00:29:22] Speaker 03:
But it didn't say that.

[00:29:23] Speaker 03:
It just said 3611 is irrelevant.

[00:29:26] Speaker 01:
Yes, Your Honor, that's true.

[00:29:28] Speaker 01:
Okay.

[00:29:28] Speaker 01:
And once again, it's because the premise of this is not transmission, which is 3611.

[00:29:33] Speaker 01:
The premise is interconnection.

[00:29:35] Speaker 03:
Okay, but it doesn't say any of that in the order.

[00:29:37] Speaker 03:
You're telling us that now.

[00:29:39] Speaker 03:
And we have to review the order that's before us.

[00:29:48] Speaker 01:
What NextEra has also said, Your Honor, is that NextEra has made clear that it knows how to protect its rights to congestion revenue rights.

[00:29:57] Speaker 01:
It specified in the interconnection agreement that it would get them under certain circumstances.

[00:30:01] Speaker 01:
So it knows that there is one path to congestion revenue rights available.

[00:30:08] Speaker 01:
Next Era also failed to timely assert its rights under 3611 if it thought it had those rights at the time the Interconnection Agreement was signed.

[00:30:21] Speaker 03:
This issue of the – Yeah, but that's – none of this is in the commission's order.

[00:30:24] Speaker 01:
The commission did address the question of timeliness on the complaint order.

[00:30:30] Speaker 05:
First of all, on timeliness, a couple of things seem odd to me.

[00:30:33] Speaker 05:
One is that as far as I can tell, it's not in your brief at all.

[00:30:36] Speaker 05:
There's no argument in your brief before us that says that they're ineligible to get CRRs under the tariff.

[00:30:44] Speaker 05:
Your argument in the brief is completely that they gave away their ability to get CRRs as an interconnection customer, and therefore it follows, as naturally as night follows the day, that they can't possibly get CRRs as a project sponsor.

[00:31:02] Speaker 05:
But it doesn't say anything about whether they would be eligible to get CRRs under the tariff.

[00:31:09] Speaker 05:
It doesn't deal with that argument at all in the brief, as far as I can tell.

[00:31:12] Speaker 05:
Correct me if I'm wrong.

[00:31:13] Speaker 05:
No, that is true, but the orders do mention it at the... So then with respect to what the orders say about it, can I just ask this question?

[00:31:18] Speaker 05:
So the orders do mention that, at least I think the... I think the rehearing order mentions it.

[00:31:23] Speaker 05:
I didn't see the original order mentioning it.

[00:31:25] Speaker 03:
No, it's right here.

[00:31:25] Speaker 03:
It says it didn't have to consider 3611, quote, because it agreed to a particular treatment in the interim agreement.

[00:31:34] Speaker 03:
In the agreement.

[00:31:34] Speaker 03:
Yes, and again, your office...

[00:31:37] Speaker 01:
This goes back to which path to Rome Next Era is traveling.

[00:31:41] Speaker 01:
It is traveling the path of an interconnection customer and not of a transmission developer, which implicates 3611.

[00:31:47] Speaker 01:
There are arguments that the interconnection agreement doesn't account for

[00:31:53] Speaker 01:
rights that it would have were a transmission developer really greatly expands the scope of what it thinks the interconnection agreement is for.

[00:32:01] Speaker 01:
The interconnection agreement is there to ensure that they're able to interconnect the generation facilities to the grid, which they were able to do.

[00:32:09] Speaker 01:
and for which they got the benefit of that bargain.

[00:32:13] Speaker 01:
It's not there just to lay out and specify and include and exclude every other conceivable right that they might have.

[00:32:19] Speaker 05:
So this gets back to whether it's possible to be both an interconnection customer and a project sponsor.

[00:32:25] Speaker 05:
Can I just, let me close the loop on the question of, let's suppose it's possible to be a project sponsor.

[00:32:31] Speaker 05:
They didn't do things on a timely enough basis.

[00:32:33] Speaker 05:
That was part of your argument.

[00:32:34] Speaker 07:
Yes.

[00:32:35] Speaker 05:
And that, as far as I can tell, that nod is not in your brief.

[00:32:38] Speaker 05:
It's only in the rehearing order.

[00:32:40] Speaker 05:
It's not in the original order.

[00:32:41] Speaker 05:
In the rehearing order, it does say, at paragraph 18 on JA 418 to 419, that they, Next Terra would have had the ability to apply in a timely manner for merchant transmission facility status for the interim project and project sponsor status.

[00:32:55] Speaker 05:
Next Terra did not take these steps.

[00:32:57] Speaker 05:
Is that what you're referring to?

[00:32:58] Speaker 05:
Yes, Your Honor.

[00:32:59] Speaker 05:
So then, but then later on, in the final paragraph of the order,

[00:33:03] Speaker 05:
The commission says, therefore, we need not address the merits of next year's request for waiver of the timing requirements under Kaiser's tariff as the merits of the waiver requests remain irrelevant to our decision.

[00:33:13] Speaker 05:
And that makes it seem like, well, the timeliness was only offered to show

[00:33:19] Speaker 05:
the first argument, which is that these are mutually exclusive categories, that they can't be both.

[00:33:23] Speaker 05:
And they must have understood that, because had they not understood that, they would have applied in a timely fashion.

[00:33:28] Speaker 05:
Because then when you get to the end of the order, the FERC says, it's irrelevant.

[00:33:32] Speaker 05:
Timeliness is just irrelevant here.

[00:33:34] Speaker 05:
And so that means that the argument that, under the tariff, they could have gotten it, but they didn't do it in a timely fashion, just drops out of the equation as far as FERC's concerned.

[00:33:43] Speaker 05:
And so we're back to the argument that Judge Tatel was referring to, which is,

[00:33:46] Speaker 05:
It may be true that project sponsors and interconnection customers are mutually exclusive in this context, but the FERC order doesn't really seem to say that.

[00:33:55] Speaker 01:
The FERC order does not really seem to say that, but NextEra's behavior does, and that's what FERC was pointing out in the order.

[00:34:01] Speaker 01:
NextEra first brought up section 36.11 at the time the California ISO said it may model this interim upgrade for purposes of congestion revenue rights.

[00:34:13] Speaker 01:
At that point, all of a sudden NextEra said, well,

[00:34:17] Speaker 01:
Next era said we would like to obtain the congestion revenue rights under that for Section 3611.

[00:34:23] Speaker 01:
We didn't raise rights that we might hypothetically have had as a transmission developer under our interconnection agreement.

[00:34:29] Speaker 01:
And again, that is mixing and matching two different ways to build the grid and in a fashion that the Commission simply didn't contemplate

[00:34:41] Speaker 01:
in crafting the pro forma language of the interconnection agreement.

[00:34:46] Speaker 01:
They've also, as the interviewer's brief pointed out, never made the case that they are, in fact, a project sponsor or that the interim project is a merchant transmission facility.

[00:34:55] Speaker 05:
But they're trying to make that case now.

[00:34:56] Speaker 01:
They are.

[00:34:57] Speaker 05:
Right.

[00:34:57] Speaker 05:
And so their argument is, look,

[00:35:00] Speaker 05:
I don't even have to explain whether it makes any sense for me to have an eligibility for CRRs under the tariff.

[00:35:06] Speaker 05:
I don't have to explain that at this stage because I still get to try.

[00:35:11] Speaker 05:
And you just haven't told me in an order, which is what this Court reviews, why I can't make that argument.

[00:35:16] Speaker 01:
Yes, I heard the Court ask three separate times whether it made sense for Next Era to be able to obtain congestion revenue rights under both the interconnection agreement and under the tariff.

[00:35:26] Speaker 01:
And council, I think, was unable to answer that question because it does not make sense.

[00:35:31] Speaker 01:
Interconnection.

[00:35:31] Speaker 05:
And I think the commission would be free to explain that on remand if we had to send it back because the order already doesn't already say that.

[00:35:39] Speaker 01:
The order does not say that, but the commission examined the interconnection agreement language at issue, found that it was unambiguous, and then in the second order, it checked its work.

[00:35:48] Speaker 03:
But you've agreed with us that that's not accurate, right?

[00:35:54] Speaker 03:
Didn't you, I mean, you agree that that's wrong.

[00:35:58] Speaker 03:
That all the agreement, nothing in the agreement precludes obtaining CRs under the tariff.

[00:36:06] Speaker 03:
It just says they may obtain them in lieu of repayment.

[00:36:12] Speaker 01:
I hope I haven't been ambiguous myself, Your Honor.

[00:36:16] Speaker 01:
What the interconnection agreement says is that they have

[00:36:20] Speaker 01:
In paragraph nine of appendix eight of the interconnection agreement, which is the only part of that agreement specific to this project, is that they have waived their right to obtain congestion revenue rights because they do not have a right to obtain a refund for building this interim project.

[00:36:37] Speaker 01:
That is very clear.

[00:36:38] Speaker 01:
The orders find that that language is clear and unambiguous.

[00:36:42] Speaker 01:
And if I've said something different, that was not what I intended to do.

[00:36:45] Speaker 03:
No, I'm glad you corrected that.

[00:36:46] Speaker 03:
That's fine.

[00:36:47] Speaker 03:
But we'll keep going there.

[00:36:49] Speaker 01:
But the Commission, to get back to your question, Judge Rennebassen, the Commission not only found that the relevant terms of the letter agreement and the interconnection agreement are clear and unambiguous, but in the rehearing order, it checked its work.

[00:37:00] Speaker 01:
It looked at the extrinsic evidence that NextEra suggested, which was, in fact, the silence that is troubling NextEra.

[00:37:07] Speaker 01:
not an actual piece of evidence at all, but the lack of language.

[00:37:13] Speaker 01:
And the commission found that that did not change the result.

[00:37:16] Speaker 01:
This is still, the interconnection agreement still lays out what Next Era's rights are, and here, what they are not, which is to obtain any sort of reimbursement or refund for constructing this interim project.

[00:37:31] Speaker 05:
And so- Where does the re-hearing order say that

[00:37:35] Speaker 05:
The interconnection agreement not only lays out their eligibility to obtain CRRs, but it shows that that's the only way they can obtain CRRs, that there is no eligibility remaining under the tariff, that they necessarily had to agree to that in the interconnection agreement.

[00:37:54] Speaker 01:
The best language is in paragraph 19 at JA-419, Your Honor, and also paragraph 20, JA-419-2420.

[00:38:04] Speaker 01:
The Commission interpreted the tariff there even though it did not need to look beyond the letter agreement and it didn't reach the different result.

[00:38:11] Speaker 01:
In making this interpretation, as shown in this paragraph, the Commission continues to view NextEra only as an interconnection customer and never finds that it could have been a project sponsor.

[00:38:23] Speaker 03:
let me let me take let's go back the judge train of us was asking about the rehearing or so

[00:38:33] Speaker 03:
in support of its position, and its first position, that, quote, Section 3611, quote, does not apply here.

[00:38:42] Speaker 03:
It says this.

[00:38:43] Speaker 03:
It says, the letter agreement clearly states that next year would receive refunds, would receive refunds, would not receive refunds unless the interim project became a permanent transmission, right?

[00:38:59] Speaker 01:
Yes, sir.

[00:38:59] Speaker 03:
And that's totally accurate.

[00:39:01] Speaker 03:
That is accurate.

[00:39:01] Speaker 03:
It's the next sentence.

[00:39:02] Speaker 03:
The parties thus decided to forgo Section 3611, and in fact agreed that.

[00:39:12] Speaker 03:
See, that's the logical fallacy right there.

[00:39:16] Speaker 03:
The therefore is your problem.

[00:39:19] Speaker 03:
The fact that they agreed that they would not get

[00:39:23] Speaker 03:
would not receive any refunds unless the interim project became a permanent transmission facility.

[00:39:29] Speaker 03:
The fact that they agreed with that does not logically lead to the conclusion that they therefore agreed that they couldn't get them under 3611.

[00:39:37] Speaker 03:
That's the logical fallacy of the FERC's decision, I think.

[00:39:41] Speaker 01:
Isn't it?

[00:39:42] Speaker 01:
No, Your Honor, I disagree.

[00:39:43] Speaker 01:
This shows that NextEra knew how to protect its rights.

[00:39:46] Speaker 01:
It knew that should any part of that interim project remain connected to the system permanently, that it would want the attendant congestion revenue rights.

[00:39:58] Speaker 01:
This, again, is a temporary facility.

[00:40:00] Speaker 01:
It's a patch.

[00:40:01] Speaker 01:
It's intended to facilitate delivery.

[00:40:04] Speaker 03:
Just before – tell me once again how you would explain why – does

[00:40:12] Speaker 03:
why this is not a logical fallacy here.

[00:40:18] Speaker 03:
Just on the terms, I don't think you can, for Conwin's case here, by saying, well, next era knew how to negotiate or knew it was a sophisticated player, as you're saying.

[00:40:32] Speaker 03:
We're stuck with the language of the agreement and the language of the FERC order and rehearing order.

[00:40:38] Speaker 03:
And I see a logical fallacy in it that I haven't heard an explanation from you as to why that isn't a logical fallacy based on what FERC tells us.

[00:40:49] Speaker 03:
You've told us a lot of things that aren't in the FERC order, but I haven't seen anything – you haven't pointed to anything in the FERC order itself that explains this problem, that

[00:41:00] Speaker 01:
Paragraph two of the hearing order, Your Honor.

[00:41:03] Speaker 01:
NextEra is an interconnection customer under a large generator interconnection agreement among Southern California Edison Company, NextEra, and CIISO that governs the interconnection of the 250-megawatt Genesis solar plant near Desert Center, California.

[00:41:20] Speaker 01:
That statement excludes the possibility that NextEra is something else.

[00:41:24] Speaker 01:
The Commission wasn't looking at NextEra as anything other than an interconnection customer trying to attach itself to the grant.

[00:41:32] Speaker 05:
But their point, NextEra's point, is that, yeah, the Commission only looked at us as an interconnection customer.

[00:41:37] Speaker 05:
But you know what?

[00:41:38] Speaker 05:
We want to be a project sponsor.

[00:41:40] Speaker 05:
And we want to get CRRs under the project sponsor lane, which is open to us under the tariff.

[00:41:47] Speaker 05:
And nothing in the commission's order treats with whether we can be considered a project sponsor.

[00:41:52] Speaker 05:
It only says that we can't get CRRs as an interconnection customer, which is definitely true.

[00:41:57] Speaker 05:
Nobody disputes that.

[00:41:58] Speaker 05:
But why is that necessarily to the exclusion of getting CRRs as a project sponsor?

[00:42:05] Speaker 01:
The intervener brief explains, I think more in more detail than I can, that in order to become a project sponsor, you have to announce yourself to the independent system operator ahead of construction.

[00:42:17] Speaker 05:
So right, so that's all, those are all seem to me perfectly well taken arguments that NextEra is going to have to contend with on whether they can get status as a project sponsor.

[00:42:26] Speaker 05:
But that's not the argument that Firth made in its brief and it's not the argument that Firth made in its orders.

[00:42:31] Speaker 01:
No, FERC took a different view of this, but that doesn't mean that FERC disagrees with anything that interveners have said or could not have made those findings.

[00:42:39] Speaker 05:
But it's hard for us to affirm FERC's orders on a rationale that only the interveners putting forth and that FERC says, and I take it to be true, that you agree with that rationale, but it's not in the order.

[00:42:51] Speaker 01:
I do agree with it.

[00:42:52] Speaker 01:
I appreciate the tension that you're hearing, but FERC's view of this was solely of an interconnection customer attempting to find a way to connect itself to the grid and striking an unusual bargain for a temporary facility in order to effectuate that.

[00:43:13] Speaker 05:
And one follow-up question on the original order, which is, as I understood the original order, the point Perk was making was that the nature of this beast is that there just aren't any CRRs under the tariff agreement.

[00:43:29] Speaker 05:
That if you understand the way that the grid is conceived of, that there just can't – that the KAIZO is barred from even issuing any CRRs under the tariff.

[00:43:37] Speaker 05:
That there's just no such thing.

[00:43:39] Speaker 05:
But that argument – and then that would be an answer.

[00:43:43] Speaker 05:
I mean, it would be a dispositive answer, I think.

[00:43:45] Speaker 05:
But that argument is not one that was put forward to us in the briefing.

[00:43:52] Speaker 01:
The commission did find on pages 22 and 23 of the complaint, which are JA 382, and again, paragraph 21 of the rehearing order, JA 420, that because this facility was so unusual and because it was temporary, that the California system operator should not treat it as part of the grid.

[00:44:10] Speaker 01:
The California system operator should not allocate, model or allocate congestion revenue rights because, and part of this has to do with

[00:44:22] Speaker 01:
I'm sorry, but should not model this and should not distribute the congestion revenue rights because this agreement in the interconnection agreement, again, in Appendix A, paragraph 9, that this is not a network upgrade, means that this facility is not properly considered part of the grid.

[00:44:40] Speaker 05:
Right.

[00:44:40] Speaker 05:
So if that's true, then there aren't any CRRs available under the tariff at all, I think.

[00:44:46] Speaker 05:
And if there aren't any CRRs available under the tariff at all,

[00:44:50] Speaker 05:
That's a complete answer to next year's claim that they're eligible to get CRRs under the tariff because the answer is well there aren't any.

[00:44:57] Speaker 01:
It is your honor.

[00:44:58] Speaker 05:
Why didn't if that's true and if that's in the original order then why isn't it an argument that Burke made to us in the brief?

[00:45:06] Speaker 01:
It sounds as though we should have your honor.

[00:45:08] Speaker 01:
That is in the orders that is a correct statement and to the extent it was left out of the brief I apologize.

[00:45:17] Speaker 02:
All right.

[00:45:18] Speaker 02:
Thank you.

[00:45:19] Speaker 02:
Thank you.

[00:45:20] Speaker 02:
Mr. Weaver.

[00:45:32] Speaker 04:
Good morning, Your Honor.

[00:45:33] Speaker 04:
Let me try to address the questions that have been before the Court.

[00:45:37] Speaker 04:
And first, let me clarify.

[00:45:38] Speaker 04:
The interviewees agree with FERC's order.

[00:45:44] Speaker 04:
By expressly agreeing, the key term here is network upgrades.

[00:45:48] Speaker 04:
By expressly agreeing that these interim facilities would not be classified as network upgrades, Nextera was agreeing to Edison's sole requirement in doing this deal, and that was that no additional costs would flow to Edison rate payers for these interim facilities.

[00:46:04] Speaker 04:
Now that could come in two forms.

[00:46:05] Speaker 04:
It could come in the form of cash reimbursement, or it could come in the form of

[00:46:11] Speaker 04:
lost congestion revenues that would result in creating new CRRs and allocating them to NextEra.

[00:46:17] Speaker 04:
That's why on that basis alone, the first paragraph in each of the FERC orders, FERC says these are not network upgrades, and on that basis alone, it is efficient to conclude that we should deny NextEra's complaint.

[00:46:32] Speaker 04:
This distinction between facilities that are network upgrades and are not network upgrades is universal to all generator interconnections.

[00:46:39] Speaker 04:
Every single new generator that interconnects to the KISO grid or any grid has some facilities that it truck triggers and has to finance and construct that are network upgrades and some that are not.

[00:46:50] Speaker 04:
And no generator has ever received cash reimbursement or CRRs for those facilities that are not classified as network upgrades.

[00:47:01] Speaker 04:
It's a fiction that these agreements do not speak to CRR.

[00:47:04] Speaker 03:
So is that the answer to the question, well, the reason the agreement doesn't deal with the tariff is everybody at the table agreed the tariff was just irrelevant.

[00:47:16] Speaker 03:
The tariff was just unavailable in this circumstance.

[00:47:20] Speaker 03:
Is that your answer to that question?

[00:47:22] Speaker 04:
I mean, the tariff's not irrelevant, but yeah, certainly the CRR sections would be irrelevant.

[00:47:27] Speaker 03:
I'm not talking about 3611.

[00:47:30] Speaker 04:
Right.

[00:47:30] Speaker 04:
Mr. Estes is right that they don't have to reserve every single right available to them under the tariff.

[00:47:37] Speaker 04:
But neither does the CAISO and Edison have to list every single section that's in opposite.

[00:47:42] Speaker 04:
We use big catch-all words that are full of for precedent, like not network upgrades.

[00:47:47] Speaker 04:
That's what that captures.

[00:47:49] Speaker 05:
So does that mean that you just, as an inherent matter, one cannot be both an interconnection customer and a project sponsor?

[00:47:59] Speaker 04:
To be sure, as our brief explains in detail,

[00:48:03] Speaker 04:
Next era has no roads to Rome.

[00:48:05] Speaker 04:
It couldn't also be a project sponge.

[00:48:07] Speaker 04:
No.

[00:48:08] Speaker 04:
Under the agreement, because they're not network upgrades, and under all the reasons we put forth in our brief about the tariff.

[00:48:14] Speaker 04:
And FERC did get to this in the re-hearing order.

[00:48:16] Speaker 04:
I think FERC went beyond, let's put aside the network upgrade question, let's look at some of their arguments under the tariff, and we don't see anything here as well.

[00:48:24] Speaker 05:
But there's two different ways to look at the potential applicability of the tariff.

[00:48:28] Speaker 05:
One is, yeah, you might be a project sponsor in theory, but you just didn't take the steps you needed to prove your project sponsor status.

[00:48:36] Speaker 05:
You didn't apply in a timely fashion.

[00:48:37] Speaker 05:
You didn't go through the Article 24 process, or maybe I'm getting the terminology wrong.

[00:48:42] Speaker 05:
No, that's all right.

[00:48:42] Speaker 05:
Okay, you didn't go through that correct process.

[00:48:45] Speaker 05:
That all, and I understood those arguments that you were putting forward.

[00:48:49] Speaker 05:
That all assumes that it's at least possible to be both a project sponsor under the tariff and an interconnection customer under the interconnection agreement.

[00:48:57] Speaker 05:
But as I understand the argument that you started with and that Ferck is making, it's that it's just impossible.

[00:49:03] Speaker 05:
It doesn't even make any sense to think about an entity being both an interconnection customer and a project sponsor.

[00:49:10] Speaker 05:
There's not two routes.

[00:49:11] Speaker 04:
Yes, that's right.

[00:49:14] Speaker 04:
But I also take something.

[00:49:16] Speaker 04:
I mean, we discussed Nextera's lack of actions after this for a different reason.

[00:49:21] Speaker 04:
And that is, Nextera's inaction after these facilities were constructed really belies all its arguments.

[00:49:27] Speaker 04:
I mean, if it actually believed that it was somehow entitled to CRRs under the tariff, why didn't it do anything?

[00:49:33] Speaker 04:
Nextera, in this matter, is the CAISO's most sophisticated market participant.

[00:49:37] Speaker 04:
It is the only holder of the only merchant transmission CRRs in the CAISO.

[00:49:42] Speaker 04:
It's almost regularly submits an application through our transmission planning process, through the Section 24 transmission process, and it has numerous requests every year under the Generator Interconnections.

[00:49:55] Speaker 05:
So your argument is the same as Ferfs on the lack of timeliness and everything.

[00:49:58] Speaker 05:
It's just, yeah, they were untimely, but it just shows

[00:50:01] Speaker 05:
that they and everybody else understood that they couldn't get access to CRs as a project sponsor.

[00:50:06] Speaker 05:
Everybody knew that that was a background assumption against which the interconnection agreement was in.

[00:50:10] Speaker 04:
Yes, because that is all part of what it means that these facilities were not classified as network upgrades.

[00:50:18] Speaker 04:
I see my time is up.

[00:50:19] Speaker 04:
Any more technical questions?

[00:50:21] Speaker 02:
Yes, thank you.

[00:50:22] Speaker 02:
Does Mr. Estes have any time?

[00:50:25] Speaker 02:
All right, why don't you take two minutes?

[00:50:27] Speaker 06:
Thank you, Your Honor.

[00:50:28] Speaker 06:
I'll hit a few points briefly.

[00:50:30] Speaker 06:
The intervener's brief at pages 17 through 18 clearly says there are two roads to Rome I commended to you.

[00:50:36] Speaker 06:
The Federal Center did not avail itself of either of these terror processes, meaning 3611 or the agreement.

[00:50:45] Speaker 06:
There's never been any place prior to the mangled discussion in these orders that ever

[00:50:50] Speaker 06:
Where forever could it be seen to say you cannot be a project sponsor if you're an interconnection customer.

[00:51:00] Speaker 06:
That is newly minted.

[00:51:01] Speaker 06:
It's never, ever been said.

[00:51:03] Speaker 06:
And we shouldn't be paying a price for some unarticulated rule.

[00:51:08] Speaker 06:
CRRs are not a cost sent to load.

[00:51:11] Speaker 06:
They are simply taking a benefit that exists because of the funding that NextEra, which is one of the major solar developers, put 500 megawatts of solar energy in.

[00:51:22] Speaker 06:
And those are the projects they've issued here.

[00:51:24] Speaker 06:
They funded these projects, the upgrades.

[00:51:27] Speaker 06:
The benefits we're seeking are benefits that those upgrades created that are a windfall to load.

[00:51:34] Speaker 03:
Finally, assume we agree that, aren't you running the risk here of a kind of a peer effect reading?

[00:51:42] Speaker 03:
Let's assume the court agreed with you that.

[00:51:44] Speaker 03:
that first order as written can't stand, it has to go back.

[00:51:50] Speaker 03:
They seem to have so many other ways of arguments that probably haven't been made here that would end up with next year not getting CRRs, either because there are none or because it doesn't qualify under 3611.

[00:52:05] Speaker 03:
So what do you accomplish here other than

[00:52:11] Speaker 03:
obtaining a nice judicial opinion on administrative law.

[00:52:15] Speaker 06:
There's a lot of discussion about what is fair.

[00:52:17] Speaker 06:
I would submit to you that what is fair is that we get a reasoned response to our arguments.

[00:52:20] Speaker 06:
Right.

[00:52:21] Speaker 06:
And we didn't get that.

[00:52:23] Speaker 06:
And I would submit to you also, I haven't.

[00:52:25] Speaker 03:
I understand that.

[00:52:26] Speaker 03:
That I get.

[00:52:26] Speaker 03:
I mean, this is what we deal with all the time.

[00:52:30] Speaker 03:
Do you see why I'm asking you the question?

[00:52:32] Speaker 03:
It just seems to me that in the end, you're not going to get your CRRs anyway.

[00:52:36] Speaker 06:
We think we will.

[00:52:38] Speaker 06:
We have answers to everything you've heard today, and we'd like to find out.

[00:52:43] Speaker 06:
The timeliness question has an answer.

[00:52:45] Speaker 06:
Hear me with this.

[00:52:47] Speaker 06:
In 2013,

[00:52:50] Speaker 06:
I talked about this.

[00:52:51] Speaker 06:
Edison filed this amended agreement with FERC.

[00:52:54] Speaker 06:
It told everybody that Desert Center is the sole beneficiary of the benefits derived from the installation of this project.

[00:53:03] Speaker 06:
That's why we only found out

[00:53:05] Speaker 06:
a month before we start a days or weeks before we sent a letter to Kaiser saying we want these.

[00:53:11] Speaker 06:
So we reacted with dispatch after learning of the surprise.

[00:53:16] Speaker 06:
We learned of it as a surprise that there would be benefits that we paid for.

[00:53:21] Speaker 06:
We would submit the equities actually are in our favor.

[00:53:24] Speaker 06:
And those facts I just explained explain why some of this window stuff and the timeliness.

[00:53:30] Speaker 06:
There's an argument about whether we fulfilled it or not.

[00:53:33] Speaker 06:
We don't even know

[00:53:34] Speaker 06:
The record doesn't so for sure.

[00:53:35] Speaker 06:
When was the actual service date of the final bit of the facilities?

[00:53:40] Speaker 06:
We actually don't know that.

[00:53:42] Speaker 06:
And if you stand back from all of this, if there are hurdles, 3611, places in our way, we argued – and this is a facially legitimate argument – that that's unjust and unreasonable under FERC's regulations and under the Federal Power Act.

[00:53:59] Speaker 06:
Why are interconnection customers singled out to be denied this tariff route?

[00:54:06] Speaker 06:
And we got no answer.

[00:54:08] Speaker 06:
So we would remove those obstacles, but we think we cleared them.

[00:54:11] Speaker 06:
And we just ask for the chance to find out, Your Honor.

[00:54:14] Speaker 06:
We ask that you vacate and remand or alternatively remand.

[00:54:18] Speaker 06:
And thank you for your time.

[00:54:19] Speaker 06:
I know this is kind of an unusual case.

[00:54:23] Speaker 07:
Thank you.

[00:54:23] Speaker 07:
Thank you.