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Case number 15-1237 et al.

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Portland General Electric Company petitioner versus Federal Energy Regulatory Commission.

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Mr. Acker for petitioner, Portland General Electric Company.

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Mr. Christensen for petitioner, Patu Wind Farm.

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Ms.

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Rallender for respondent.

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Morning, Your Honor.

[00:00:55] Speaker 06:
May it please the Court, I'm Lawrence Hacker with the firm of Van Ness Feldman.

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In Washington, I represent Portland General Electric Company.

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I'm accompanied by my colleague and partner, Gary Bachman.

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This is not the usual public utility regulatory policies act case in which a party files a complaint against the State Commission for failing to observe the requirements of the Act and FERC issues a declaratory order and then skates around the

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whether it's a claratory order is simply a memorandum of law that has no binding effect.

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In this case, the complaint was filed against the public utility, Portland General, and FERC said it was operating under Section 210 of the, I'm sorry, under Section 206 and 309 of the Federal Power Act.

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First Order described the requirements and told Portland General what to do.

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And we thought they did it defectively.

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They didn't satisfy any of the standards of either sections 206 or 309.

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Nonetheless, we were at risk under the Federal Power Act for some pretty hefty penalties of a million dollars a day for

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for any non-compliance.

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Because of that, Portland General changed its practices and adjusted them.

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And FERC later asserted in an order that we had complied with their directives, which is not the kind of language that you would expect in a memorandum of law type order.

[00:02:40] Speaker 05:
Well, yes or no?

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I took your reply brief to say, okay, FERC says what they did is simply a declaratory statement that has no binding effect, and I took your reply brief to say, okay, we have no fight.

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If?

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You have a fight with Wind Farm, but not with FERC.

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We do have disagreements with the Wind Farm.

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But how do we know about that?

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You're talking first, so I'm asking myself, wait a minute, you don't have any fight with FERC now.

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Well, as long as this court's going to affirm that FERC's orders were as ineffective as we thought they were, or that we... Well, that's what FERC says, right?

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That's what FERC says.

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You don't have any fight with FERC, is that correct?

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As long as you agree with FERC that their orders are of no effect, that we don't have a fight with FERC.

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So why are you up first?

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I don't know.

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Why are you a petitioner at this point?

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We didn't know that until after they filed their brief.

[00:03:35] Speaker 04:
Okay.

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Why, well, okay, so does that, in technical terms, does that mean you're not a party aggrieved under 313?

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Is that, that's what it means, right?

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If it's declaratory only.

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You're not aggrieved by the, and we don't have jurisdiction, correct?

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If this is covered by the Midland line of cases, then we wouldn't be a party aggrieved.

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You wouldn't have, have the jurisdiction.

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What do we do?

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We don't have to even worry about jurisdiction.

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You don't have a claim at this point.

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You don't even have an argument.

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Again, as long as you believe that the court that the FERC's order is ineffective and you say as much, then we're not agreed.

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With one exception, and that's the FERC's order purported to apply a rule not only to Portland General, but to all other utilities.

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Now, that's not us.

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You know, we are a utility, so we can encounter this again.

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There's one, there's one little, I'm sorry, did you want to?

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Well, it's not speculative that they announced the rule that they purported to have generally applicable.

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What's the rule?

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What is the rule?

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Thirty-seven years ago, they promulgated a rule in Order 16.

[00:04:56] Speaker 03:
No, no, no.

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What's the rule that they announced in this case?

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The rule they announced is that a utility can't rely on contract language approved by its state commission

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that restricts the delivery rights, that restricts the payment obligation to power that's actually delivered after it was scheduled.

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That's inconsistent with the rule that they promulgated 37 years ago after going through the requirement, satisfying the requirements.

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of the Public Utility Regulatory Policies Act of having consultations with state commissions and notice and comment.

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Wait a minute, Counsel.

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Well, there's no reason for us to get into that, is there?

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I mean, you, at this point, you have no quarrel, you said earlier, you have no quarrel with Perk.

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So you really, your quarrel now is with wind farm, only with wind farm, is that correct?

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That's the primary quarrel that's left, yes.

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Well, speaking of that then, what do we do, let's assume we agree with FERC that this is declaratory and it's governed by Midland.

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What do we do with the wind farms argument about dynamic scheduling?

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Oh, I'd reject them.

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I would do that summarily.

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But wait.

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But do we have jurisdiction to consider?

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Do we have jurisdiction to consider?

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Well, FERC dismissed the... I'm asking you, FERC said, as I understand it, that that's just a question of state, of the power purchase agreement, right, and the state regulations.

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They're not going to get into that, right?

[00:06:41] Speaker 06:
No, I didn't understand FERC to characterize it that way.

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What do you think FERC said?

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I understood FERC to characterize the dynamic scheduling question.

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By the way, what is dynamic scheduling?

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Can you explain it to us?

[00:06:55] Speaker 06:
Sure.

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Let's start with our contract, which says that the utility, that the wind farm has to announce what its schedule, what its delivery will be in advance and do it on an hourly basis.

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Is that in your contract?

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Yes.

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The hourly basis?

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Yes.

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It's in the section 4.4 of the contract.

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So whatever they do, you now have to, whatever they do, you now have to, Portland now has to purchase all of their power, correct?

[00:07:25] Speaker 06:
Correct.

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Okay, so where does dynamic scheduling, why do they want dynamic?

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I'll ask them this, since they have to, since Portland has to buy all of its power, what is dynamic scheduling?

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What is it and what does it add to this?

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What dynamic scheduling would do, and there are various forms of dynamic scheduling, but what dynamic scheduling would do would be to adjust the requirement that we take their power on a roughly instantaneous basis.

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One form of dynamic scheduling is 15-minute scheduling, and another form that is to establish... So what I don't understand is it sounds like what dynamic scheduling means.

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It's kind of real time.

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It means you do it in real time.

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close to real time as you can get.

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But what I don't understand is, if the idea behind dynamic scheduling is getting as close to real time as you can get, let's just stipulate that that's what it is, and there's an obligation that you take everything, what's the advantage of getting close to real time if you have to take everything anyway?

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The advantage, what's the advantage to them?

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I don't see that there's a difference.

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What's the disadvantage to you then?

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The disadvantage is that we had contracted using the state approved contract for a flat product that allows us to predict

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what other resources we'll be able to call on, we'll have to call on, to fill in the gaps.

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This is essentially a contract dispute.

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Oh, it's certainly a contract.

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I thought from reading the brief,

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that dynamic scheduling was something Portland would do to accommodate a variable source of power from a wind farm.

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So that since Portland had to buy it all, that when, I assume, maybe this is wrong, that what dynamic scheduling meant was that when power from Portland came to Portland, power from Patu came to Portland because the wind was blowing,

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that dynamic scheduling would automatically reduce the power from your other suppliers.

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Not true?

[00:09:39] Speaker 06:
No, it would automatically allow for their power to be received by us, but their dynamic scheduling is an ancillary transmission service that's provided within the Portland General System.

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It's not a service that's available to a party that's not a transmission customer.

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This is a little screwed up at this point because you're really arguing in opposition to Patu.

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You're going first.

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Exactly.

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And so, you're really responding to Patu.

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Only because I was asked to, yes.

[00:10:38] Speaker 04:
Okay, fine.

[00:10:39] Speaker 04:
Why don't we go on and hear from Patu and you'll get a few minutes to respond to that.

[00:10:42] Speaker 04:
Very good.

[00:10:43] Speaker 06:
Thank you.

[00:10:43] Speaker 04:
Okay, let's go on.

[00:10:53] Speaker 04:
And maybe – is it Mr. Christensen?

[00:10:56] Speaker 02:
Yes, sir.

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Maybe you could start by just explaining something to me.

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If both the Oregon Commission and FERC have ruled that Portland has to take all of the wind farm's power, what's your complaint?

[00:11:11] Speaker 02:
So our complaint, and for the record, I'm Eric Liston, so I'm representing PAW-2.

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The complaint is that FERC has only required 15-minute scheduling.

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That still leaves PAW-2 required to purchase wind integration services from Bonneville, which means they essentially have to use scheduling.

[00:11:28] Speaker 05:
Why did you stop me for a moment?

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Did it require 15 minutes, or did they offer that?

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I thought it was a little confusing what happened at rehearing, didn't it?

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So we filed a complaint to enforce these orders asking for dynamic scheduling.

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FERC said 15-minute scheduling is close enough.

[00:11:48] Speaker 05:
I thought they offered it and FERC grabbed it.

[00:11:52] Speaker 02:
Is that what it was?

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Is that correct?

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No, the 15-minute scheduling didn't come about until after we litigated this case.

[00:12:00] Speaker 05:
I know, I know, I know.

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Well, that's kind of where we wound up as a bottom line.

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The reason that we're here is because that doesn't... You don't think 15 minutes is that... 15 minutes reduces... You want a minute by minute.

[00:12:22] Speaker 02:
15 minutes reduces the unnecessary scheduling cost, but it doesn't eliminate them.

[00:12:27] Speaker 04:
Why do we have any jurisdiction over that?

[00:12:29] Speaker 04:
That's a question... Let me finish my question.

[00:12:33] Speaker 04:
That's a question of what the state regulation means and the power purchase agreement.

[00:12:40] Speaker 02:
I respectfully disagree, Your Honor.

[00:12:42] Speaker 04:
I thought you might, but why?

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First of all, we independently brought a Federal Power Act claim that was improperly ignored in this case.

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We provide a clear evidence that Portland General is discriminating against- Wait, wait, wait, wait.

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Don't go on.

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That's the second part of your case.

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My question is about this 15-minute issue and your argument about, I take it dynamic scheduling would solve that problem for you, right?

[00:13:11] Speaker 02:
Yes, dynamic scheduling would solve the problem.

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But my question is, we only have jurisdiction, as I understand the way the statute's structured.

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The only situations under which this court would have any jurisdiction at all,

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would be if someone is challenging, if you were challenging the Oregon PURPA regulation, which you aren't, or if this related to Portland's transmission service.

[00:13:40] Speaker 02:
Yes.

[00:13:41] Speaker 04:
Which it doesn't.

[00:13:42] Speaker 02:
No, it doesn't.

[00:13:43] Speaker 02:
With respect to your honor, I mean, Mr. Acker described dynamic scheduling as a transmission service.

[00:13:47] Speaker 04:
Well, it can be.

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But in this case, Portland's not your transmission provider.

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Bonneville is your provider.

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But the- You're a supplier.

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of power to – in other words, FERC says – and I don't see why they aren't right – that Portland's transmission services are not at issue here vis-a-vis the wind farm.

[00:14:09] Speaker 02:
But the problem is that Portland has refused to accept dynamic scheduling, which defeats the whole process of getting the wind power from the wind farm.

[00:14:17] Speaker 05:
But you're not – But you're not – But Charles Taylor is asking why is this a transmission issue?

[00:14:21] Speaker 05:
It's not.

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Burke has said, contrary to the Oregon Commission, this is not a transmission issue.

[00:14:34] Speaker 05:
Your argument is rather convoluted.

[00:14:36] Speaker 05:
Your argument is that Bonneville had to somehow accommodate you at Portland's

[00:14:49] Speaker 02:
So I think under the Federal Power Act, and FERC just ignored the precedent here, but under the Federal Power Act, once Portland General offers dynamic scheduling, the California ISO case that we cite in our brief requires them to include that in their open access tariff.

[00:15:10] Speaker 02:
In addition, under the Federal Power Act, these are core jurisdictions.

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Which is error.

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That's why.

[00:15:17] Speaker 05:
But that's not a transmission question.

[00:15:20] Speaker 02:
Yes, it is a transmission question, Your Honor.

[00:15:21] Speaker 02:
Those cases, the Cal ISO case, is a transmission case.

[00:15:26] Speaker 02:
And it says that, I mean, the open access transmission tariff does govern transmission service.

[00:15:32] Speaker 02:
And it's required once they offer dynamic scheduling that they include it, which they haven't.

[00:15:37] Speaker 02:
FERC ignored that argument, although we raised it.

[00:15:40] Speaker 04:
That's the argument that FERC said, you raised too late, right?

[00:15:45] Speaker 02:
Well, that's one of the arguments.

[00:15:47] Speaker 04:
You raised it in an answer to an answer.

[00:15:49] Speaker 02:
Incorrect.

[00:15:49] Speaker 02:
We raised it in an answer to a motion, a motion to dismiss.

[00:15:52] Speaker 04:
No, I just said that's what FERC said.

[00:15:53] Speaker 02:
Well, that's what FERC said.

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I mean, it's an indefensible answer, but that's what they said, yes.

[00:15:58] Speaker 04:
But if they're right about that,

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I mean, we have to defer to FERC's interpretation of its own procedural regulations.

[00:16:05] Speaker 02:
We're not going to suggest a book on that.

[00:16:07] Speaker 02:
But you don't have to defer to when FERC asks you to call a motion to dismiss on the merits something that it's not.

[00:16:15] Speaker 02:
I see.

[00:16:15] Speaker 05:
Well, that's a good point.

[00:16:16] Speaker 05:
But the essential question, even if you've raised it, is whether this is a transmission issue or not.

[00:16:24] Speaker 02:
Yes.

[00:16:25] Speaker 05:
And Judge Pagel points out that the statutes are a little complicated.

[00:16:36] Speaker 05:
a transmission question, and it's convoluted to try to get it through Bonneville?

[00:16:42] Speaker 02:
There's no determination in these orders that it's not a transmission issue, Your Honor.

[00:16:46] Speaker 05:
Oh yes, in the orders they did say, they disagreed with Arda.

[00:16:51] Speaker 02:
They disagreed with Oregon.

[00:16:53] Speaker 05:
No, Your Honor.

[00:16:57] Speaker 02:
They said that the orders here were consistent with Oregon.

[00:17:00] Speaker 02:
Oregon said this is a transmission issue.

[00:17:02] Speaker 02:
We have no jurisdiction.

[00:17:03] Speaker 02:
FERC ordered that.

[00:17:04] Speaker 04:
That's clearly wrong, isn't it?

[00:17:06] Speaker 04:
Pardon me?

[00:17:07] Speaker 04:
That's totally wrong, isn't it?

[00:17:09] Speaker 02:
That, what, FERC said?

[00:17:10] Speaker 02:
No, Oregon said.

[00:17:12] Speaker 02:
No, because the, under section 210A-1 of FERC.

[00:17:16] Speaker 04:
Can I go back to, I just don't understand.

[00:17:21] Speaker 04:
Just explain this to me.

[00:17:22] Speaker 02:
Okay.

[00:17:22] Speaker 04:
I don't understand how a seller of power, like the wind farm, is engaging Portland's transmission service.

[00:17:36] Speaker 04:
As I understood this, your transmission provider is Bonneville.

[00:17:42] Speaker 02:
That's right.

[00:17:43] Speaker 04:
And all the statutes and all the regulations, including 210H, talk about the transmission function of a utility subject to FERC regulation.

[00:17:58] Speaker 04:
So how does this relate to Portland's transmission function?

[00:18:08] Speaker 02:
Even Mr. Hacker said that the dynamic scheduling is a transmission service.

[00:18:12] Speaker 04:
It can be with respect to a transmission customer, but how can it be with respect to a

[00:18:18] Speaker 04:
supplier of power.

[00:18:20] Speaker 04:
That's my only question.

[00:18:22] Speaker 02:
How can it be with respect to a supplier of power?

[00:18:24] Speaker 02:
Well, the supplier has to move from the wind farm to the Troutdale station.

[00:18:30] Speaker 02:
The problem here is that Portland has sort of built a wall around the Troutdale station by refusing to allow dynamic scheduling.

[00:18:36] Speaker 02:
If it doesn't allow dynamic scheduling, it's blocking the chosen transmission function that would allow PAW-2 to deliver all of its output.

[00:18:47] Speaker 04:
So when I asked you, I just want to make sure I understand.

[00:18:51] Speaker 04:
When I asked you at the beginning what your problem is with first order, since it's already said they have to purchase all your power, your problem, right, is that under the 15-minute scheduling thing,

[00:19:06] Speaker 04:
that if Patu can't supply the power during that period of time when it said it has to buy it from Mana, right?

[00:19:16] Speaker 02:
Yes.

[00:19:17] Speaker 04:
That's what this, from your perspective, that's what the problem is, right?

[00:19:20] Speaker 02:
That's the problem that we're trying to solve here.

[00:19:22] Speaker 02:
The dynamic scheduling would solve.

[00:19:24] Speaker 02:
I get it.

[00:19:27] Speaker 05:
So I understand

[00:19:44] Speaker 05:
minutes and kilowatts, rather than megawatts, but kilowatts, right?

[00:19:48] Speaker 05:
Yes.

[00:19:49] Speaker 05:
All right.

[00:19:50] Speaker 05:
Your cost then is the packaging cost.

[00:19:53] Speaker 05:
Plus, if I understand correctly, plus what you charge Portland is a little less than your avoided cost

[00:20:06] Speaker 05:
from Bonneville, is that correct?

[00:20:08] Speaker 02:
So the avoided costs are paid by Portland.

[00:20:11] Speaker 02:
What we paid at Bonneville is the transmission costs.

[00:20:15] Speaker 05:
But you had to pay Bonneville to get you a little extra power put in the package.

[00:20:21] Speaker 02:
Yes.

[00:20:21] Speaker 05:
Now that little extra power that you put in the package, you turn around and sell to Portland with the stuff you generate yourself, right?

[00:20:31] Speaker 02:
Right.

[00:20:33] Speaker 05:
But the extra amount,

[00:20:35] Speaker 05:
You can only charge market price.

[00:20:38] Speaker 02:
You can't charge... Well, that's what.

[00:20:40] Speaker 02:
Portland pays us market price.

[00:20:42] Speaker 02:
We have to pay Bonneville whatever the price is.

[00:20:44] Speaker 05:
So you don't get avoided costs from Portland.

[00:20:46] Speaker 02:
That's part of the problem.

[00:20:48] Speaker 05:
That's part of your cost.

[00:20:49] Speaker 02:
Right.

[00:20:49] Speaker 02:
And the other part of the problem is that if... The packaging cost.

[00:20:52] Speaker 02:
Right.

[00:20:53] Speaker 02:
Well, and there's also the problem of when the schedule is below the actual output of the product, the power just disappears into the system.

[00:21:00] Speaker 02:
It's not delivered, even though...

[00:21:03] Speaker 02:
That problem would also be solved by dynamic scheduling.

[00:21:06] Speaker 04:
Just out of curiosity, how much money are we talking about here?

[00:21:10] Speaker 04:
How much is PATU losing by having to purchase power that it turns out it can't deliver at the predicted time?

[00:21:21] Speaker 02:
It's in the range of hundreds of thousands of dollars.

[00:21:24] Speaker 02:
I don't know the exact amount.

[00:21:26] Speaker 05:
It's in the range of what?

[00:21:28] Speaker 02:
Hundreds of thousands of dollars.

[00:21:29] Speaker 05:
Let me ask you a question, Council.

[00:21:31] Speaker 05:
Suppose the contract specifically said, as your adversary, your colleague says, suppose the contract specifically said, delivery shall be in the form of block power,

[00:21:53] Speaker 05:
your position be that?

[00:21:55] Speaker 02:
So, I mean, if the contract actually said we have a specific obligation to deliver in a specific block, then we'd have to comply with the contract.

[00:22:05] Speaker 02:
That's not what the contract says.

[00:22:06] Speaker 05:
All right, so then ultimately this issue is a contract dispute.

[00:22:11] Speaker 02:
No, the contract issue has already been resolved by the Oregon Commission.

[00:22:15] Speaker 02:
They said there's no particular requirement for transmission.

[00:22:19] Speaker 05:
So this is a transmission dispute.

[00:22:21] Speaker 05:
Well, wait a minute.

[00:22:26] Speaker 05:
Portland have an obligation.

[00:22:29] Speaker 05:
Portland, the FIRP says, they have an obligation to take all your power.

[00:22:34] Speaker 02:
Under PIRP.

[00:22:35] Speaker 05:
Under PIRP.

[00:22:36] Speaker 05:
But they don't answer the question whether or not dynamic delivery is necessary, dynamic scheduling is necessary.

[00:22:45] Speaker 02:
That's the whole problem.

[00:22:46] Speaker 02:
Under the Federal Power Act part of this case, they just ignore it.

[00:22:49] Speaker 02:
And that would give us complete relief.

[00:22:51] Speaker 05:
Well, they don't ignore it in part because they don't see you as a transmission customer.

[00:22:54] Speaker 02:
I don't think that part of it is in the order, Your Honor, in which respect.

[00:22:58] Speaker 05:
I thought it was in the description at the beginning.

[00:23:01] Speaker 02:
We'll have to ask counsel.

[00:23:02] Speaker 02:
But in any event, that's incorrect because under the established precedent, the dynamic scheduling is a transmission service.

[00:23:09] Speaker 02:
They're obligated to provide it once they start providing it to their own resources.

[00:23:12] Speaker 02:
They're obligated to include it in their transmission tariff.

[00:23:15] Speaker 02:
And they're obligated to cooperate in establishing the links that are necessary to establish a dynamic schedule between Bonneville.

[00:23:23] Speaker 05:
The final question is,

[00:23:29] Speaker 05:
B.A.

[00:23:29] Speaker 05:
issue.

[00:23:31] Speaker 05:
Don't we have to defer to that?

[00:23:34] Speaker 02:
No, Your Honor.

[00:23:35] Speaker 02:
I mean, FERC has an obligation to, when we presented clear evidence of discrimination on the part of Portland General, they have an obligation to consider... Well, discriminate your discrimination claim assumes you're a transmission customer.

[00:23:50] Speaker 02:
No, Your Honor.

[00:23:51] Speaker 02:
I mean, it assumes we're taking interstate transmission, and that's all that's required.

[00:23:57] Speaker 04:
You're not taking interstate transmission from Portland.

[00:24:01] Speaker 04:
You're taking it from Bonneville.

[00:24:03] Speaker 02:
It would be a transmission service from Portland, the dynamic scheduling, because there has to be this essentially electronic link that allows Bonneville to move the power from our wind farm into the Portland General System.

[00:24:16] Speaker 02:
That dynamic scheduling is transmission.

[00:24:19] Speaker 02:
FERC ignored that, and that's the Federal Power Act error in this case.

[00:24:24] Speaker 05:
And why do you need to amend that?

[00:24:28] Speaker 02:
Do I have a complaint?

[00:24:30] Speaker 02:
No.

[00:24:31] Speaker 02:
I mean, other than the post-hoc rationalization that says it's not a binding order, that's clearly rejected by the FERC itself.

[00:24:41] Speaker 02:
It said, in fact, we're ordering Portland General to take all net output from Bonneville.

[00:24:46] Speaker 05:
Those words are clearly in the order.

[00:24:48] Speaker 05:
So where does that take you?

[00:24:49] Speaker 02:
So that takes us to the binding order and the enforcement order that says they have to do 15-minute scheduling.

[00:24:59] Speaker 05:
the FERC not giving a tough enough order?

[00:25:02] Speaker 02:
I don't object to FERC not giving a tough enough order.

[00:25:04] Speaker 02:
I object to the FERC Council reinventing the order, reinterpreting it to something that FERC didn't say.

[00:25:10] Speaker 05:
Do you have any complaint with FERC's order?

[00:25:15] Speaker 02:
The complaint with FERC's order is that they ignored our evidence of discrimination under the federal power.

[00:25:20] Speaker 05:
That's under the federal power.

[00:25:21] Speaker 05:
I'm asking whether you have a complaint about FERC.

[00:25:24] Speaker 02:
So not with the FERC order itself.

[00:25:26] Speaker 02:
No, you like the PURPA part of it.

[00:25:27] Speaker 02:
I like the PURPA part of it.

[00:25:28] Speaker 07:
You just don't want it undersold by FERC counsel.

[00:25:30] Speaker 02:
Yes.

[00:25:31] Speaker 02:
I think the only problem we have is that FERC councils mischaracterize the order here as non-binding, which is just not the case.

[00:25:39] Speaker 04:
What do you do with Midland?

[00:25:42] Speaker 04:
Midland is virtually identical.

[00:25:46] Speaker 02:
I beg to differ, Your Honor.

[00:25:48] Speaker 02:
In Midland, the orders under review there said notice, and this is really typical, and there's dozens of FERT cases that have the same language, notice is hereby given that the Commission declines to initiate an enforcement action under section H2A of PURPA.

[00:26:03] Speaker 02:
and it directs Midland to go to the appropriate court.

[00:26:07] Speaker 02:
There's no such language in this order.

[00:26:10] Speaker 02:
And if FERC really meant to do just an advisory order, they clearly knew how to do that.

[00:26:15] Speaker 02:
They didn't do it here.

[00:26:16] Speaker 04:
Well, if our opinion says it's advisory, doesn't that solve your problem?

[00:26:19] Speaker 04:
Pardon me?

[00:26:19] Speaker 04:
If our decision, whatever we issue, says it's only declaratory.

[00:26:24] Speaker 04:
That doesn't solve it.

[00:26:25] Speaker 04:
That's not what you want, right?

[00:26:26] Speaker 02:
No, that's not what I want.

[00:26:27] Speaker 02:
We want it mandatory.

[00:26:28] Speaker 02:
We want a mandatory decision, absolutely.

[00:26:31] Speaker 04:
Even if it's, let's assume we thought you were right, it's mandatory.

[00:26:34] Speaker 04:
I still don't see why we have any jurisdiction because it seems to me to be a purple wire.

[00:26:40] Speaker 02:
So under Section 210H1, this court clearly has jurisdiction because under Section 210H1 there are two tests.

[00:26:49] Speaker 05:
Because you're back to the FBA.

[00:26:51] Speaker 02:
Right.

[00:26:52] Speaker 05:
And so that Section 210H1 says essentially if it's... I want you to know, Counsel, whether we agree with you.

[00:27:00] Speaker 02:
With respect to your honor, I think it is a direct consequence of the language in section 210H1.

[00:27:09] Speaker 07:
But just to be clear, the 210H1 argument was also one that was considered in Midland.

[00:27:12] Speaker 02:
Yeah.

[00:27:14] Speaker 02:
So, no, your honor, 210H1, that was a 210H2 case.

[00:27:19] Speaker 07:
Okay, but the language is pretty parallel between H1 and H2.

[00:27:23] Speaker 07:
In fact, I think Midland itself talked about the fact that H1 and H2 speak similarly on this issue.

[00:27:30] Speaker 02:
I don't think Midland held that, but in any event, I disagree with the premise that the language is similar.

[00:27:37] Speaker 02:
In fact, 210H1 says if it's an order that's within FERC's Federal Power Act jurisdiction, then it's treated as a rule under the Federal Power Act and enforced in the same way, which means, among other things, that this court has jurisdiction under Section 313 and that we have the right to enforce the order under Section 317, which is what we're trying to do.

[00:28:00] Speaker 02:
But that's basically what Midland said about H2.

[00:28:04] Speaker 02:
But H2 is different because that H2 has to do with the Midland non-regulated utilities implementation of PURPA.

[00:28:15] Speaker 02:
We don't have any beef with the OPC's implementation of PURPA.

[00:28:19] Speaker 02:
What we have a beef about is the Portland General's refusal to provide dynamic scheduling transmission service.

[00:28:26] Speaker 05:
All right, but bottom line, this contract

[00:28:38] Speaker 05:
all courts, right?

[00:28:42] Speaker 02:
No, Your Honor, because we have an independent route to dynamic scheduling through the requirements of the Federal Power Act, Order 888, and so on.

[00:28:50] Speaker 05:
In other words, you're arguing such a contract would be illegal?

[00:28:53] Speaker 02:
No, such a contract, I mean, I think what happened here is the contract doesn't... No, no, I'm giving you my hypothetical.

[00:28:58] Speaker 05:
Okay.

[00:28:58] Speaker 05:
Suppose the contract specifically says that all that Portland is required to do is take the power in 15-minute blocks

[00:29:09] Speaker 02:
If that's really what the contract said, then... You're out of court.

[00:29:13] Speaker 02:
You're out of all the courts.

[00:29:14] Speaker 02:
We would, I think, in that hypothetical, what we'd do is go to FERC and say this contract is contrary to PURPA.

[00:29:21] Speaker 02:
We'd have to get a declaratory order.

[00:29:23] Speaker 02:
We'd have to go back to the U.S.

[00:29:24] Speaker 05:
District Court in Oregon to challenge the... In other words, your bottom line would be if the contract said that, it would be illegal?

[00:29:30] Speaker 02:
Yes.

[00:29:30] Speaker 05:
I wondered why you didn't just say that right at the outset.

[00:29:33] Speaker 02:
So I didn't follow your question very well to begin with, Your Honor.

[00:29:37] Speaker 04:
I apologize.

[00:29:38] Speaker 04:
All right.

[00:29:39] Speaker 04:
We'll hear from the Commission.

[00:29:57] Speaker 01:
Good morning.

[00:29:58] Speaker 01:
May it please the Court, Elizabeth Rylander, for the Commission.

[00:30:02] Speaker 01:
As the Court has correctly discerned, this case does not present a transmission issue, but a purpose issue.

[00:30:07] Speaker 01:
And FERC did, in fact, issue declaratory orders.

[00:30:10] Speaker 04:
What about counsel's argument that dynamic scheduling is a transmission matter?

[00:30:16] Speaker 01:
Your Honor, the transmission is beyond the scope of this case because the standard contract from Oregon does not govern it.

[00:30:23] Speaker 01:
This is a finding of the Oregon Commission, and FERC agreed with it.

[00:30:27] Speaker 01:
FERC has never previously required the use of dynamic scheduling in this context, and FERC found that the case did not require it to do so here.

[00:30:40] Speaker 05:
transmission question, which is his fundamental argument.

[00:30:43] Speaker 04:
That's his argument.

[00:30:45] Speaker 04:
When I asked him, I said, look, you're a seller.

[00:30:51] Speaker 04:
Portland is not your transmission provider.

[00:30:53] Speaker 04:
You're not a transmission customer.

[00:30:55] Speaker 04:
His answer is dynamic scheduling is a transmission matter.

[00:31:01] Speaker 04:
It's part of transmission.

[00:31:04] Speaker 01:
It's within the transmission of functions, Your Honor, yes, but it is not, as the Court has mentioned previously, PATU is not a transmission customer of Bonneville Power and does not have a contractual relationship.

[00:31:19] Speaker 04:
Can you tell us what dynamic scheduling is?

[00:31:22] Speaker 01:
Dynamic scheduling is a

[00:31:25] Speaker 01:
is a means of real-time transmission of energy in which... So you just use the word transmission.

[00:31:34] Speaker 04:
I'm sorry, Your Honor?

[00:31:35] Speaker 04:
I said you just use the word transmission.

[00:31:39] Speaker 01:
You shouldn't use delivery.

[00:31:42] Speaker 01:
Yes, Your Honor.

[00:31:43] Speaker 01:
That would have been a better word.

[00:31:45] Speaker 01:
It is a means of scheduling transmission and delivery of power.

[00:31:49] Speaker 01:
Delivery of power.

[00:31:51] Speaker 04:
And is it used for situations like where you have a wind farm or a solar power where the power isn't regular?

[00:32:01] Speaker 04:
Is that where it's used?

[00:32:02] Speaker 01:
That's my understanding, Your Honor, yes.

[00:32:04] Speaker 04:
And does it affect?

[00:32:05] Speaker 04:
Is it something Portland does with its own sources of energy in order to accommodate the wind farms?

[00:32:13] Speaker 01:
The records suggest that Portland does use it in some contexts, Your Honor.

[00:32:17] Speaker 05:
Do you think Portland understands?

[00:32:18] Speaker 05:
For its own transmission customers.

[00:32:20] Speaker 01:
Is that correct?

[00:32:20] Speaker 01:
Yes, Your Honor.

[00:32:23] Speaker 01:
But what FERC found here was that dynamic scheduling was not the problem highlighted by the complaint in this case or Portland's response to it.

[00:32:35] Speaker 01:
The issue was that Portland General was not accepting all the delivery of Patu's power.

[00:32:41] Speaker 01:
Both FERC and the Oregon Commission found in their orders

[00:32:46] Speaker 01:
FERC in the initial order at Paragraph 55, JA 534, the Oregon Commission in Order 14287 at 14, JA 330, that the standard contract does not govern or restrict the means of transmission.

[00:33:00] Speaker 01:
Both commissions also noted that there may be more than one way to transmit Patu's energy, and neither commission weighted into the particulars of what was most appropriate.

[00:33:15] Speaker 05:
corollary to the proposition that under PURPA, Portland must take all of Patu's property?

[00:33:25] Speaker 01:
Under PURPA, Your Honor, it's not required.

[00:33:26] Speaker 01:
Do you have my question?

[00:33:27] Speaker 01:
Under PURPA, Your Honor, dynamic scheduling is not required and never has been.

[00:33:32] Speaker 05:
But also the contract.

[00:33:37] Speaker 05:
Do you have an interpretation of the contract?

[00:33:39] Speaker 01:
A section 4.4 of the contract required delivery in hourly block increments.

[00:33:45] Speaker 01:
FERC found that that was unacceptable and that it set up a barrier to the delivery of all of PATU's power.

[00:34:00] Speaker 01:
FERC did not disturb the contract, but held that sections 1.13 and 4.1 of the contract, which governed Portland General's purchase obligation, must be read along with section 4.4 in order to require, and that Portland was required to accept all of the power Patu delivered to it.

[00:34:22] Speaker 05:
Portland was- In other words, the statutory provision undermined

[00:34:27] Speaker 05:
to a certain extent the notion that Portland had as to what the contract meant.

[00:34:35] Speaker 05:
But you never answered the question how much, what do we do, we leave this for somebody else.

[00:34:46] Speaker 01:
The facts of this case, Your Honor, are very specific and there are any

[00:34:53] Speaker 01:
any qualifying facility in a situation like the one Patu finds itself in has recourse before FERC.

[00:35:00] Speaker 01:
Any other qualifying facility can come to FERC and say the utility has thrown up obstacles to our delivering power and we need help removing those obstacles.

[00:35:11] Speaker 01:
In this case, FERC did find that Portland had incorrectly structured its delivery requirements to inhibit Patu's delivery of power.

[00:35:20] Speaker 01:
And in the orders challenged here,

[00:35:22] Speaker 01:
FERC found that Portland General had to accept all of Patu's power one way or another.

[00:35:29] Speaker 01:
It didn't specify what way Portland General had to do that.

[00:35:32] Speaker 01:
In the second complaint order, which is not on review here, the Commission found that Portland General's use of 15-minute scheduling blocks and permitting delivery in kilowatt hours resolved the problems at issue here.

[00:35:48] Speaker 01:
Patu did not challenge that on re-hearing and cannot appeal that finding.

[00:35:51] Speaker 05:
Yeah, I'm a little confused about that.

[00:35:52] Speaker 05:
I was trying to figure out from counsel where the 15 minutes came from.

[00:35:57] Speaker 01:
The 15 minutes came not from the orders on review here, but from the second complaint order.

[00:36:01] Speaker 05:
Yes, but who came up with the 15 minutes?

[00:36:04] Speaker 05:
Firt or Portland?

[00:36:06] Speaker 01:
I believe Portland, Your Honor.

[00:36:08] Speaker 05:
So it's sort of an offer to resolve the issue?

[00:36:12] Speaker 01:
I believe so.

[00:36:13] Speaker 01:
I think that's also in conjunction with a separate rule, First Order 764, I believe it is, which is also not challenged here.

[00:36:28] Speaker 01:
Yes, Your Honor, I think it did.

[00:36:29] Speaker 05:
Did you make that argument in your brief?

[00:36:31] Speaker 01:
We did argue in our brief that the events described in the second complaint order have overtaken the events in the first.

[00:36:38] Speaker 05:
Yeah, but you didn't say moot.

[00:36:39] Speaker 01:
We did not use the word moot, Your Honor, no.

[00:36:41] Speaker 01:
That helps.

[00:36:43] Speaker 01:
I wish I had, Your Honor.

[00:36:44] Speaker 04:
So your position, Fert's position is, let me make sure I understand this, that under

[00:36:55] Speaker 04:
the state's proper regulations and the Power Purchase Agreement, Portland must take all of Patu's power.

[00:37:05] Speaker 01:
Yes, Your Honor.

[00:37:05] Speaker 04:
And the fact that because of the 15-minute scheduling, Patu may have to go out and buy more expensive power

[00:37:16] Speaker 04:
to meet its obligations is simply a purple question, right?

[00:37:21] Speaker 01:
Yes, Your Honor.

[00:37:21] Speaker 04:
Okay.

[00:37:23] Speaker 04:
But now I realize I don't think they make this argument, but isn't there a pretty fundamental, and the FERC regulations permit that, right?

[00:37:32] Speaker 01:
Yes, Your Honor.

[00:37:32] Speaker 04:
Isn't there, I mean, FERC, the statute says in 210A, the FERC is supposed to issue regulations that encourage small power production.

[00:37:41] Speaker 04:
And if the wind farms are losing a huge amount of money because Portland and other purchasers are requiring them to schedule their power in these 15-minute increments, which means they've got to go out and buy more expensive power, that may make this whole system unprofitable to them.

[00:38:05] Speaker 04:
So maybe there's a defect in the FERC regulation.

[00:38:08] Speaker 04:
Has anyone ever litigated that?

[00:38:10] Speaker 01:
Not to my knowledge, Your Honor.

[00:38:11] Speaker 04:
What do you think about that issue?

[00:38:13] Speaker 01:
The record does indicate here that Patu chose to sell its power to Portland General, which is a distant utility, as opposed to Bonneville Power Association or to Wasco, which is its local utility, because it could receive a higher avoided cost by doing so.

[00:38:27] Speaker 01:
So to the extent that Patu is taking on additional costs, presumably it's deemed that that's economically worthwhile.

[00:38:38] Speaker 07:
Can I ask a question about this?

[00:38:40] Speaker 07:
So your argument at the end of the day is that we don't have jurisdiction.

[00:38:43] Speaker 01:
Correct, Your Honor.

[00:38:44] Speaker 07:
And so just on the text of the jurisdictional statute, so 825 LB is the relevant provision?

[00:38:51] Speaker 01:
Yes, Your Honor.

[00:38:52] Speaker 07:
It speaks in terms of judicial review.

[00:38:53] Speaker 07:
And it says, any party to a proceeding under this chapter slash act, let's say act, any party to a proceeding under this act agreed by an order issued by the commission in such proceeding may obtain a review of such order in this court.

[00:39:06] Speaker 01:
Yes, Your Honor.

[00:39:07] Speaker 07:
And the part of that that's lacking is that this is not a proceeding under this act because it's a PURPA proceeding?

[00:39:15] Speaker 01:
That's correct.

[00:39:17] Speaker 01:
FERC found that this case could be resolved entirely under PURPA and not under the Federal Power Act.

[00:39:25] Speaker 05:
So I have two questions.

[00:39:26] Speaker 05:
There's two separate questions here that I was confusing.

[00:39:29] Speaker 05:
One is what you regard as your jurisdiction, and the second is what is our jurisdiction.

[00:39:35] Speaker 05:
Yes, Your Honor.

[00:39:36] Speaker 05:
They don't necessarily correlate, do they?

[00:39:39] Speaker 01:
They do not.

[00:39:40] Speaker 07:
But your argument, the argument that you've made in your briefs to us is that we lack jurisdiction.

[00:39:44] Speaker 01:
Yes, Your Honor.

[00:39:44] Speaker 07:
And this is the provision that defines our jurisdiction.

[00:39:47] Speaker 01:
Yes, Your Honor.

[00:39:49] Speaker 01:
The Federal Power Act, Section 313, does not apply to FERCPA cases because of the difference you mentioned between chapter and act.

[00:39:57] Speaker 07:
So is that the basic argument at the end of the day is we don't have jurisdiction because the way FERC resolved the proceeding before it

[00:40:05] Speaker 07:
It was, it turned out to be a proper proceeding, not an FPA proceeding.

[00:40:08] Speaker 07:
Correct, Your Honor.

[00:40:09] Speaker 04:
And it doesn't make any difference on the theory whether the FERC order was declaratory or not, right?

[00:40:16] Speaker 01:
Not really, Your Honor, no.

[00:40:19] Speaker 04:
Right, it doesn't.

[00:40:20] Speaker 04:
Makes no difference.

[00:40:21] Speaker 01:
No, Your Honor.

[00:40:22] Speaker 07:
I have two follow-up questions, if I could, just on this line.

[00:40:24] Speaker 07:
One is, if the party who brings the proceeding before FERC says, I've got some FPA claims,

[00:40:33] Speaker 07:
and then FERC resolves the case on PURPA grounds, the way you must be construing the statute is it doesn't matter that the party brought it as an FPA case.

[00:40:44] Speaker 07:
All that matters is what FERC chose to do with it, and FERC chose to make it into a PURPA case, ergo the judicial review provision doesn't apply.

[00:40:53] Speaker 07:
That's the way you read the language.

[00:40:55] Speaker 01:
Yes, Your Honor.

[00:40:55] Speaker 01:
FERP has broad discretion to manage its own dockets, and as it understood this case, it raised only FERPA claims.

[00:41:05] Speaker 07:
Okay, then let me ask this one follow-up question, which is under 825 LA, which deals with rehearings,

[00:41:13] Speaker 07:
That says, any person agreed by an order issued by the commission in a proceeding under this chapter, which I assume is supposed to be act, I don't know for sure, but I'm just going to assume that it is, can seek rehearing, can apply for rehearing.

[00:41:27] Speaker 07:
Correct.

[00:41:30] Speaker 07:
I'm just trying to square these two.

[00:41:31] Speaker 07:
If you thought under B that because FERC treated it as a per-per proceeding, we don't have jurisdiction to review it, then wouldn't the fact that FERC treated it as a per-per proceeding for purposes of A mean that there was no FERC jurisdiction over rehearing either?

[00:41:50] Speaker 01:
That's an interesting question, Your Honor.

[00:41:52] Speaker 07:
I would say that... But yeah, you didn't treat it that way because you actually decided the rehearing position.

[00:41:57] Speaker 01:
Yes, and the re-hearing – the issues on re-hearing did include Federal Power Act arguments, and I think in that case the commission's safest and most prudent course was to consider the re-hearing arguments and evaluate them again.

[00:42:10] Speaker 01:
But for a second time on re-hearing, FERC found that the issue was not Federal Power Act-related but FERPA-related.

[00:42:15] Speaker 07:
So do you understand my question, which is that if FERC – if, as you say, FERC thought that it was PURPA-related and not FPA-related, and that means for B, we don't have jurisdiction, why doesn't it mean for A that FERC doesn't have jurisdiction over a rehearing condition?

[00:42:30] Speaker 01:
So if I understand your question, Your Honor, are you asking why FERC issued a rehearing order in the first place?

[00:42:35] Speaker 07:
Right, because I'm understanding the way you read B, that means we don't have jurisdiction because you treated it as a PURPA proceeding.

[00:42:43] Speaker 01:
Yes, Your Honor.

[00:42:43] Speaker 07:
then wouldn't the logical consequence of that also be that FERC didn't have jurisdiction over the rehearing petition?

[00:42:50] Speaker 01:
FERC did not interpret it that way, but I understand your argument.

[00:42:58] Speaker 01:
I can't say exactly why FERC did not see it that way, but FERC did not.

[00:43:05] Speaker 05:
How about the jurisdictional argument here?

[00:43:10] Speaker 05:
If, let us say,

[00:43:12] Speaker 05:
When we ask whether a party has agreed, we assume the merits of the argument, right?

[00:43:19] Speaker 05:
Yes, Your Honor.

[00:43:20] Speaker 05:
You all agree there's a form of standing, right?

[00:43:24] Speaker 05:
Yes, Your Honor.

[00:43:25] Speaker 05:
Okay.

[00:43:26] Speaker 05:
If you, the merits of Winn-Farm's position is that this was an FPA problem because there was discrimination in transmission.

[00:43:39] Speaker 05:
Yes, Your Honor.

[00:43:41] Speaker 05:
Why would we not have jurisdiction over that question?

[00:43:46] Speaker 05:
I mean, you could have done it right.

[00:43:50] Speaker 05:
But why wouldn't we have jurisdiction?

[00:43:53] Speaker 01:
The court does have jurisdiction over questions purely of the Federal Power Act, as Your Honor is saying.

[00:43:58] Speaker 01:
But in this case, FERC viewed this case through the lens of FERPA.

[00:44:04] Speaker 05:
You may have legitimately decided

[00:44:14] Speaker 05:
But I'm just going to the jurisdictional issue.

[00:44:20] Speaker 05:
I don't see why Petitioner Winfarm doesn't have jurisdiction in this court because all the question is whether they're agreed.

[00:44:32] Speaker 05:
And their argument is that FERC illegally, improperly, ignored the FPA issue because it's a transmission question.

[00:44:52] Speaker 01:
Um, yes, your honor.

[00:44:56] Speaker 04:
But then I assume your position is, I'm glad you asked it that way, because I was going to ask you, if you were to prevail here, would the first sentence of our opinion say, we lack jurisdiction because the order was declaratory, or we lack jurisdiction because this is a perpet case?

[00:45:14] Speaker 04:
And I take it in response to Judge Silverman's question, your answer is, say the latter, right?

[00:45:19] Speaker 01:
We lack jurisdiction because this is a perpet case.

[00:45:21] Speaker 01:
Because this is a perpet issue, right?

[00:45:23] Speaker 01:
Yes, Your Honor.

[00:45:24] Speaker 04:
So all that stuff in your brief about this being declaratory only, we should ignore that.

[00:45:29] Speaker 04:
It doesn't really affect our jurisdictional issue, right?

[00:45:34] Speaker 07:
No, Your Honor, but... Oh, wait, wait, wait.

[00:45:35] Speaker 07:
I thought I did, because I thought that the... I thought your point... There's two ways.

[00:45:40] Speaker 07:
There's... The middle of the deal with this.

[00:45:42] Speaker 07:
There's two theories under which we have jurisdiction.

[00:45:45] Speaker 07:
One is to say that it's a proceeding under this Act agreed by an order.

[00:45:50] Speaker 07:
And the answer to that is, it's not a proceeding under this Act because we treat it as a proper proceeding.

[00:45:55] Speaker 07:
But then there's another route, which is to say, well, under 210H,

[00:45:59] Speaker 07:
The fact that it's a PURPA proceeding doesn't answer it because it converts everything that's PURPA into an FPA.

[00:46:05] Speaker 07:
As to that, you go to declaratory because you say, wait a minute, it's got to be an enforcement.

[00:46:10] Speaker 07:
And it's not an enforcement.

[00:46:12] Speaker 07:
for H purposes because it's declaratory.

[00:46:15] Speaker 07:
We're not doing all the stuff we normally do in an enforcement proceeding.

[00:46:17] Speaker 07:
Therefore, you don't get around it under the 210H route either.

[00:46:20] Speaker 07:
Am I not understanding correctly?

[00:46:22] Speaker 01:
Okay, that is correct.

[00:46:23] Speaker 01:
I think I am misunderstanding the line of questioning here.

[00:46:28] Speaker 01:
So as this court laid out in Midland, Section 313 of the Federal Power Act does not give the court jurisdiction over matters arising under Purpose Section 210H because of the way 313 is structured.

[00:46:42] Speaker 01:
So PATU cannot try to string together a theory under which there is jurisdiction under federal power of section 313 because the commission mentions purpose section 210H.

[00:46:58] Speaker 07:
In other words, it's not just because 210H speaks in terms of PURPA issues being FPA issues, speaking in general terms.

[00:47:07] Speaker 01:
That's correct.

[00:47:08] Speaker 07:
That's not enough to give jurisdiction under 825L.

[00:47:11] Speaker 01:
That is correct.

[00:47:12] Speaker 01:
Section 313 of the federal power act does not confer jurisdiction in that situation.

[00:47:17] Speaker 01:
But in any circumstance, the commission's orders here were not

[00:47:23] Speaker 01:
we're not attempting to enforce any rule, but just to state FERC's views on the dispute at hand.

[00:47:30] Speaker 01:
There is, the court will also back jurisdiction when FERC is not attempting to enforce a rule.

[00:47:35] Speaker 04:
What do you think about Mr. Christensen's argument that the order here is different from Midland, and that this one is in fact, that you, the council, has mischaracterized, that this rule, unlike Midland, is in fact mandatory?

[00:47:53] Speaker 01:
I don't understand his argument that this order is mandatory, Your Honor.

[00:47:57] Speaker 01:
Just as in Midland, FERC provided – FERC did not provide any specific guidance as to how Portland General was to comply with the order.

[00:48:04] Speaker 01:
It did not specify a deadline for compliance or impose any consequences of not complying.

[00:48:10] Speaker 01:
And certainly there – certainly FERC did not – FERC did not require that the parties follow up on the order, for example, by making a compliance – Did you, in the reconsideration order –

[00:48:24] Speaker 05:
with the PERPA obligation?

[00:48:27] Speaker 01:
That was in the second complaint order, Your Honor, which is not on review here and for which PERPA – for which PATU did not seek rehearing.

[00:48:35] Speaker 01:
So that finding is – yes, FERC did make that finding.

[00:48:39] Speaker 01:
That finding is not on review here.

[00:48:41] Speaker 05:
I know it's not on review, but that goes back to the question of whether or not the issue that was in the case before us has moved.

[00:48:49] Speaker 01:
I would say the issue is moot, Your Honor.

[00:48:51] Speaker 01:
And moreover, Patu has taken the first two orders.

[00:48:56] Speaker 01:
Yes, Your Honor.

[00:48:57] Speaker 01:
Patu has taken first two orders, the same ones for which it has sought review here, and is attempting to enforce them in federal district court in Oregon.

[00:49:06] Speaker 05:
Well, why would they want to enforce an order of FERCs that says 15 minutes is okay?

[00:49:12] Speaker 05:
Because that's what Portland is offering now, and that's what they're doing.

[00:49:17] Speaker 05:
I don't get it.

[00:49:19] Speaker 04:
Well, is Portland not complying?

[00:49:22] Speaker 04:
I thought counsel for Portland said they are taking all of Patu's power.

[00:49:26] Speaker 01:
Yes, Your Honor.

[00:49:27] Speaker 04:
So then why is Patu in court trying to enforce an order that the other side is obeying?

[00:49:33] Speaker 01:
Respectfully, Your Honor, I think you need to ask Patu that question.

[00:49:35] Speaker 01:
Can I ask?

[00:49:37] Speaker 01:
Let me just ask it.

[00:49:38] Speaker 01:
I respectfully, Judge Tatel, I think that question is better posed to Patu, but by my own reading of it is that the orders are not that bad.

[00:49:44] Speaker ?:
Okay.

[00:49:45] Speaker 04:
Unrelated, but maybe related question with respect to Patu's claim about discrimination and violating the standards of conduct.

[00:49:54] Speaker 04:
FERC's order addresses both of those on the merits, right?

[00:50:00] Speaker 04:
They say it's not discriminatory, correct?

[00:50:03] Speaker 01:
That's right, Your Honor.

[00:50:04] Speaker 04:
If it's not a transmission customer, why did FERC address, shouldn't FERC have said we just don't have jurisdiction over this?

[00:50:17] Speaker 01:
FERC would have had that option.

[00:50:19] Speaker 04:
But if it doesn't have jurisdiction, it doesn't have jurisdiction.

[00:50:22] Speaker 04:
Like us, it can't decide a case over which it has no jurisdiction.

[00:50:26] Speaker 04:
If Patu is not a transmission customer, shouldn't FERC have simply said, petition dismissed.

[00:50:31] Speaker 04:
We don't have jurisdiction.

[00:50:33] Speaker 01:
FERC had that option, Your Honor, but it chose to provide an advisory opinion saying that we don't think it's a transmission customer and we do not see any violation of the standards of conduct here.

[00:50:42] Speaker 04:
I see.

[00:50:42] Speaker 04:
So that part of it was also advisory.

[00:50:45] Speaker 04:
Why does FERC do that?

[00:50:48] Speaker 04:
Isn't FERC busy enough so it doesn't have to?

[00:50:50] Speaker 04:
Why is it issuing all these advisory opinions in mandatory terms?

[00:50:56] Speaker 04:
I mean, it's totally bizarre the way they're doing it.

[00:50:59] Speaker 04:
If they're declaratory, why don't they say they're declaratory instead of writing them as mandatory?

[00:51:05] Speaker 04:
I know you're not a FERC.

[00:51:06] Speaker 04:
You're the lawyer.

[00:51:07] Speaker 04:
So maybe you don't know the answer to this.

[00:51:11] Speaker 04:
But even more fundamentally,

[00:51:13] Speaker 04:
Why are they issuing these advisory opinions?

[00:51:16] Speaker 04:
I don't get it.

[00:51:19] Speaker 04:
What's the reason for that?

[00:51:21] Speaker 01:
In the APERPA H1 and H2, 210H1 and 210H2 setting, Your Honor, parties do sometimes take FERC's advisory opinions to district court, which is another reason this court does not have jurisdiction.

[00:51:36] Speaker 01:
Once the Commission has provided its opinion,

[00:51:41] Speaker 01:
then that would mean that this court was simultaneously reviewing FERC's position at the same time a district court was considering it.

[00:51:49] Speaker 07:
Can I ask this question, though, to follow up on Judge Schell's question?

[00:51:51] Speaker 07:
So if FERC did provide, let's say, advisory guidance on the standards of performance discrimination claim, that's a claim under the FPA.

[00:52:03] Speaker 01:
Yes, Your Honor.

[00:52:04] Speaker 07:
So if that's a claim under the FPA, then getting back to our jurisdiction, the statute says any party to a proceeding under this act, this act meaning the FPA, can bring a petition for judicial review before us.

[00:52:17] Speaker 01:
Yes, Your Honor.

[00:52:18] Speaker 07:
So why isn't there a jurisdiction for us to review FERC's order given that FERC did pronounce on an FPA issue?

[00:52:28] Speaker 01:
Again, Your Honor, although there were FPA federal power questions raised in this case, the Commission chose to view it solely through the lens of PURPA.

[00:52:37] Speaker 07:
There was... But even as to the, I thought as to the standards of performance, that if that's not a PURPA answer, that's an FPA answer, that there's not discrimination.

[00:52:50] Speaker 07:
I didn't understand, am I wrong?

[00:52:51] Speaker 01:
There is not discrimination, and part of the reason for that is that PATU is not Portland General's transmission customer.

[00:52:57] Speaker 01:
Well, it's – this does – I asked you – That's why – excuse me.

[00:53:01] Speaker 04:
That's why – aren't I right that it – so FERC's declaratory ruling on discrimination was this would not be discrimination if PATU were a transmission customer, right?

[00:53:21] Speaker 04:
Because if it's not a transmission customer, then this anti-discrimination provision in the statute doesn't apply, does it?

[00:53:31] Speaker 04:
It's not applicable.

[00:53:36] Speaker 04:
Right?

[00:53:37] Speaker 01:
Yes, Your Honor.

[00:53:38] Speaker 04:
Yes, it doesn't apply?

[00:53:39] Speaker 04:
Huh?

[00:53:42] Speaker 01:
I'm sorry, Your Honor, I'm a little confused by the question.

[00:53:45] Speaker 04:
I'm looking for the statute.

[00:53:46] Speaker 05:
Do you know, are you familiar with the Abbott and Costello routine, who's on first?

[00:53:53] Speaker 05:
Yes, Your Honor, I am.

[00:53:54] Speaker 05:
It's awful close.

[00:54:00] Speaker 07:
I think the question, I think Judge Tatel's question is, if the answer to the transmission

[00:54:06] Speaker 07:
issue that we started off with early on in the argument is that Bonneville intercedes, and so therefore that makes Patu not part of the transmission apparatus, then why are we even talking about anti-discrimination vis-a-vis Patu?

[00:54:22] Speaker 07:
Wouldn't that also be an answer to that, to the discrimination part?

[00:54:27] Speaker 07:
Wouldn't it also take Patu outside of the field of potential discrimination claimants, too?

[00:54:34] Speaker 07:
I thought that was the question.

[00:54:36] Speaker 04:
My question is, Section 205 says, can't discriminate with respect to transmission or sale of electricity subject to federal jurisdiction.

[00:54:51] Speaker 04:
Transmission or sale of electric energy subject to transmission.

[00:54:55] Speaker 04:
That's not this case, right?

[00:54:58] Speaker 04:
This isn't transmission.

[00:55:01] Speaker 04:
It's not a sale.

[00:55:02] Speaker 01:
That's correct, Your Honor.

[00:55:03] Speaker 01:
This is not a transmission case.

[00:55:05] Speaker 01:
Both other parties.

[00:55:05] Speaker 04:
So then FERC has no jurisdiction under what FERC should have said with respect to Patu's complaint is dismissed because we don't have jurisdiction under 205.

[00:55:20] Speaker 04:
It's not a transmission or sale of electric energy subject to commission jurisdiction, right?

[00:55:29] Speaker 05:
i mean you still in your case but isn't that what first should have done if it isn't then i don't understand what's happening here or could have chosen to do that your honor yes before did suggest in its opinion that it was not a threat uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh...

[00:55:59] Speaker 05:
under FBA.

[00:56:03] Speaker 01:
Or could have chosen to do that, Your Honor.

[00:56:04] Speaker 07:
Where did it say that Patu's not a transmission customer?

[00:56:07] Speaker 01:
That is in both the complaint order at paragraph 56, J.A.

[00:56:12] Speaker 01:
651 to 52, and the rehearing order of paragraph 57 to 59, J.A.

[00:56:18] Speaker 01:
652 to 53.

[00:56:27] Speaker 04:
If the court has no further questions, we'll be happy to rest on our brief.

[00:56:49] Speaker 04:
Anything else?

[00:56:51] Speaker 04:
No.

[00:56:52] Speaker 04:
Okay, thank you.

[00:56:53] Speaker 04:
Thank you, Your Honor.

[00:56:54] Speaker 04:
Thank you very much.

[00:56:55] Speaker 04:
I think, does the Council have any time left?

[00:56:58] Speaker 04:
Okay, you can take two minutes, Mr. Christensen.

[00:57:03] Speaker 06:
Thank you for your consideration.

[00:57:06] Speaker 06:
Now that this is all perfectly clear, let me see if I can provide a little bit of background information in context.

[00:57:13] Speaker 06:
The contract that was entered into between PAD 2 and Portland General

[00:57:20] Speaker 06:
It wasn't a contract of Portland General's manufacture.

[00:57:24] Speaker 06:
It was the state approved perfect contract for, it was the standard contract.

[00:57:30] Speaker 06:
The state had a provision that said, if your operational needs, if your commercial needs, or if your sense of preferences urges you as the wind farm to want different terms and conditions,

[00:57:45] Speaker 06:
you have that right and we will supervise the negotiations to make it a non-standard contract.

[00:57:54] Speaker 06:
We wouldn't have had to have in the standard

[00:57:58] Speaker 06:
any other kinds of scheduling provisions than the one that already was present, which was we'll purchase your deliveries after you pre-schedule them.

[00:58:11] Speaker 05:
That's specifically in the contract.

[00:58:14] Speaker 06:
Yes.

[00:58:15] Speaker 06:
That's what Section 4.4 of the standard contract is.

[00:58:18] Speaker 04:
That's your standard contract, right?

[00:58:19] Speaker 04:
That's the standard contract.

[00:58:20] Speaker 04:
Which the state has approved.

[00:58:21] Speaker 06:
Excuse me, which the state utility commission is approved the state approved back.

[00:58:26] Speaker 04:
I think it was back in 2007 three or four years before the contract was signed So then isn't your complaint I hear what you said about the problem with The wind farm being required under the standard contract To purchase more expensive power to meet its delivery obligations because of this 15-minute thing right I get that but

[00:58:51] Speaker 04:
Since isn't your complaint then that the FERC regulation by tolerating that itself violates 210A because it discourages the production of this power.

[00:59:04] Speaker 04:
In other words, your complaint is with the regulation which allows it.

[00:59:08] Speaker 04:
Wait a minute, you're... But that's not your complaint, is it?

[00:59:11] Speaker 05:
No, that's the other side's complaint, not it.

[00:59:15] Speaker 04:
No, you want, you don't want the FERC

[00:59:19] Speaker 04:
The FERC regulation in the contract permit Portland to impose this 15-minute obligation on you, right?

[00:59:26] Speaker 04:
Yes.

[00:59:26] Speaker 06:
Okay, that's why I ask... I'm sorry, the 15-minute obligation is not our obligation?

[00:59:30] Speaker 04:
That's why I ask whether isn't your complaint with respect to the FERC regulation that...

[00:59:36] Speaker 04:
doesn't prohibit that.

[00:59:37] Speaker 04:
In other words, your argument should be that look, you're discouraging the production of this alternative energy.

[00:59:45] Speaker 06:
That might be my argument if I was arguing for the wind farm, but that's not what I'm arguing for.

[00:59:52] Speaker 06:
I'm sorry.

[00:59:53] Speaker 06:
I'm totally sorry.

[00:59:54] Speaker 04:
I'm the utility.

[00:59:55] Speaker 04:
I'm a good guy in this case.

[00:59:56] Speaker 04:
I'm sorry.

[00:59:57] Speaker 04:
No, no, you're the bad guy.

[00:59:58] Speaker 04:
I'm sorry.

[00:59:59] Speaker 04:
If I was asking the question to the right person, what would his answer be?

[01:00:03] Speaker 04:
My suspicions his answer would be honest but wrong.

[01:00:07] Speaker 04:
I'm totally sorry.

[01:00:08] Speaker 04:
I get it.

[01:00:08] Speaker 04:
Okay.

[01:00:09] Speaker 06:
Go ahead.

[01:00:11] Speaker 06:
The other feature of this is the, and I think it's something- What about the moodless question?

[01:00:16] Speaker 05:
Why didn't you get up and say this case is moot?

[01:00:18] Speaker 05:
FERC has said in our reconsideration that 15 minutes is fine.

[01:00:24] Speaker 06:
Because there's uncertainty about whether the FERC's order actually was intended to be an effective order and or whether it wasn't, but as long as... Whether it's effective or not, their final position is one you're happy with.

[01:00:41] Speaker 06:
As long as you accept that final position, we're content with it.

[01:00:47] Speaker 06:
move because of that that's what's puzzling me it may have become move we had to change our behavior because they

[01:01:11] Speaker 05:
take all of Windfarm's products.

[01:01:13] Speaker 06:
Because we had to change our billing practices and our payment practices in order to achieve that result.

[01:01:20] Speaker 06:
That's not the result we wanted.

[01:01:22] Speaker 05:
Yeah, but now that you're happy... I'm not at all happy with it.

[01:01:26] Speaker 05:
Well, wait a minute.

[01:01:27] Speaker 05:
Are you challenging it?

[01:01:31] Speaker 06:
The FERC said that we were in compliance with their directives.

[01:01:36] Speaker 05:
It was not a matter of us... Council, you're not

[01:01:48] Speaker 06:
We offered it as a matter, as a result of what we thought was their compulsion, not as a voluntary act.

[01:01:54] Speaker 07:
So let me ask this.

[01:01:56] Speaker 07:
And for purposes of this proceeding, you're happy with FERC's treating the orders that we're now reviewing as declaratory only.

[01:02:03] Speaker 06:
We're content with that.

[01:02:05] Speaker 06:
You're content with that.

[01:02:06] Speaker 07:
But as what you're saying, that you wouldn't – had you known that at the time of the 15-minute order, the other – the second complaint that's not before us right now, that you would have acted differently in that case, had you known that the orders in this case are only declaratory?

[01:02:19] Speaker 06:
Yes, the only reason that we went to this 15-minute schedule and this change of billing practices was because we were trying to conform to what FERC characterized as its directives to avoid the penalty of a million dollars a day for not complying.

[01:02:35] Speaker 07:
So you acted the way you did in the second proceeding that resulted in the 15-minute order because you felt like you were under compulsion under these orders.

[01:02:44] Speaker 07:
Now that you've been educated and realized

[01:02:47] Speaker 07:
that FERC believes that these are not compulsory, but they are declaratory, then you're saying you would have acted differently in the 15-minute proceeding?

[01:02:54] Speaker 07:
Is that?

[01:02:54] Speaker 06:
We probably would have acted differently.

[01:02:56] Speaker 06:
We may yet act differently.

[01:02:58] Speaker 07:
Well, why?

[01:02:59] Speaker 07:
Because I thought that order is final now.

[01:03:01] Speaker 07:
Nobody sought review, right?

[01:03:03] Speaker 06:
No, nobody sought review.

[01:03:04] Speaker 06:
But the only reason we acted that way was because we thought these orders were mandatory.

[01:03:10] Speaker 05:
I see.

[01:03:10] Speaker 05:
But now that you realize they're declaratory,

[01:03:13] Speaker 05:
You now have the question whether you want to agree to the 15 minutes or not precisely.

[01:03:18] Speaker 04:
But you still but whatever you do with respect to the 15 minute you you are obligated correct.

[01:03:24] Speaker 04:
Portland is obligated to purchase all their power right.

[01:03:27] Speaker 06:
We are obligated to purchase under the contract all of the power that they deliver pursuant to an hourly schedule.

[01:03:34] Speaker 06:
And that, they rely on borrowed power.

[01:03:37] Speaker 07:
When you say pursuant to an hourly schedule, that just goes right back to your original argument that 4.4 trumps everything else, which everybody has said.

[01:03:45] Speaker 06:
It does.

[01:03:45] Speaker 06:
That's what the State Commission found.

[01:03:48] Speaker 06:
that that was the governing provision, and then FERC got involved in interpreting the state-approved contract.

[01:03:53] Speaker 05:
I think your chances of getting out of the 15 minutes are vanishingly small.

[01:03:58] Speaker 04:
Maybe.

[01:03:59] Speaker 04:
Okay, let's hear from Mr. Christensen so I can ask him my question instead of to you.

[01:04:06] Speaker 06:
Thank you for your consideration.

[01:04:09] Speaker 02:
So Mr. Christensen, you can have two minutes, too.

[01:04:13] Speaker 02:
Thank you, Your Honor.

[01:04:13] Speaker 02:
Let me address, first of all, the transmission customer question.

[01:04:16] Speaker 02:
You'll get around to my question eventually.

[01:04:19] Speaker 04:
Go ahead.

[01:04:20] Speaker 04:
You can talk about transmission.

[01:04:21] Speaker 02:
OK, let me talk about transmission customer first, and then I'll try to answer your question.

[01:04:25] Speaker 02:
But you'll have to remind me, because I kind of lost this.

[01:04:27] Speaker 02:
the thread there.

[01:04:28] Speaker 02:
So transmission customer, in fact, Patu applied, requested transmission service, requested dynamic scheduling service from Portland General, they were refused.

[01:04:40] Speaker 04:
Wait, you requested dynamic scheduling, correct?

[01:04:44] Speaker 04:
Which is?

[01:04:45] Speaker 02:
You didn't request transmission service.

[01:04:47] Speaker 02:
It is transmission service.

[01:04:49] Speaker 04:
The CalISO would... No one in this courtroom has so far been able to explain to me what... Maybe if you could explain to me what dynamic scheduling is... So dynamic scheduling, yeah.

[01:04:58] Speaker 02:
So basically dynamic scheduling is a computerized system that allows the power to be delivered as it's produced from the wind farm across the Portland General System to the... or across the Bonneville system, excuse me, to the Portland General System on a real-time basis.

[01:05:14] Speaker 04:
So it allows you to supply power to Portland General on a real-time basis.

[01:05:21] Speaker 04:
Yes.

[01:05:21] Speaker 04:
That's not a transmission project.

[01:05:23] Speaker 04:
Yes, it is.

[01:05:24] Speaker 02:
I beg to differ, Your Honor.

[01:05:26] Speaker 02:
And the Cal ISO case that's cited on page 28 of our brief holds that directly.

[01:05:30] Speaker 02:
It says, the details about dynamic scheduling contain in the standards or practices that may affect the terms and conditions of transmission service significantly, and therefore, under the Commission's rule of reason, must be filed under Section 205 of the FDA.

[01:05:43] Speaker 04:
Who are the parties in there?

[01:05:44] Speaker 02:
The California ISO, which is the transmission entity serving California.

[01:05:53] Speaker 05:
Even if you're right, that's Bonneville that's doing the transmission.

[01:05:57] Speaker 02:
No, it's Portland General.

[01:05:59] Speaker 02:
In this case, the California ISO is the Receiving Balancing Authority, the same as Portland General is the Receiving Balancing Authority.

[01:06:07] Speaker 02:
And in any event, the transmission customer definition in FERC's regulations says any eligible transmission customer, even a person who's only just seeking information about transmission.

[01:06:19] Speaker 02:
It doesn't say you have to be a transmission customer of a particular utility in order to receive the protections of the Federal Power Act.

[01:06:26] Speaker 02:
It says just the opposite of that.

[01:06:28] Speaker 02:
Any transmission customer, it prohibits discrimination against any eligible transmission customer.

[01:06:35] Speaker 02:
It doesn't matter.

[01:06:35] Speaker 02:
And it has to be that way, because otherwise what the result of this case is that Portland General's merchant function can basically build a wall around their service territory and defeat all competition in the wholesale power market.

[01:06:47] Speaker 02:
And that's the whole point of Order 888.

[01:06:48] Speaker 02:
In addition, I think the FERC abused its discretion by ignoring our Federal Power Act claims.

[01:06:55] Speaker 02:
That gives this court jurisdiction under Section 313, regardless of how the- You mean discrimination?

[01:07:02] Speaker 04:
Yes.

[01:07:03] Speaker 04:
But they didn't ignore it.

[01:07:05] Speaker 04:
But that all turns on whether, if you are, in fact, a transmission customer, you're right.

[01:07:10] Speaker 04:
Well, they didn't ignore them.

[01:07:11] Speaker 04:
They decided the discrimination issue against you.

[01:07:14] Speaker 02:
Right, and they abused their discretion in doing so.

[01:07:16] Speaker 04:
But the question is, should they have decided it at all, if Patu is not a transmission customer?

[01:07:22] Speaker 04:
Part two is a transmission customer.

[01:07:25] Speaker 04:
So we're right back to where we were.

[01:07:26] Speaker 02:
Yes.

[01:07:26] Speaker 04:
So what about my question?

[01:07:27] Speaker 04:
Isn't your complaint really with the FERC regulation that allows Portland to impose this 15-minute obligation on you?

[01:07:35] Speaker 04:
Our complaint is... That's what your complaint really is with, isn't it?

[01:07:38] Speaker 02:
With the...

[01:07:40] Speaker 02:
I'm sorry.

[01:07:41] Speaker 02:
Well, we have two complaints.

[01:07:42] Speaker 04:
One is that... I'm not talking about your complaint in this case.

[01:07:47] Speaker 04:
I'm saying your real complaint, it seems to me, is that FERC's regulations tolerate or don't prohibit these 15-minute requirements, because those have the opposite effect of, quote, encouraging

[01:08:02] Speaker 04:
the delivery of this kind of alternative energy, isn't that right?

[01:08:07] Speaker 02:
Well, our complaint with Portland General is that they don't... No, no, no.

[01:08:09] Speaker 04:
I'm asking you, it's like a hypothetical question.

[01:08:12] Speaker 04:
Okay.

[01:08:12] Speaker 04:
I mean, as I understand your complaint here, what your... I don't mean complaint in terms of the document.

[01:08:18] Speaker 02:
Yes.

[01:08:18] Speaker 04:
Your Patu's

[01:08:21] Speaker 04:
basic problem here is that it has to buy more expensive power to meet the 15-minute obligation of the contract, right?

[01:08:29] Speaker 04:
Yes.

[01:08:29] Speaker 04:
And my only question is, that sounds to me like your problem is with the FERC regulation that tolerates that.

[01:08:39] Speaker 04:
And what you should be doing is going to FERC and saying, this regulation is inconsistent with 210A because it does not, quote, encourage the development and delivery of this alternative energy.

[01:08:52] Speaker 04:
In fact, it puts a big disincentive on it.

[01:08:55] Speaker 02:
Well, in fact, that's basically the PRPA part of our complaint.

[01:09:00] Speaker 02:
It was basically that.

[01:09:01] Speaker 02:
But also, under the- But you're not making an argument here.

[01:09:04] Speaker 02:
The FERB regulations under the Federal Power Act and Order 888 specifically require dynamic scheduling to be included in the oath.

[01:09:12] Speaker 02:
And so we would have had, if FERB had not abused its discretion in this case, we would have been able to reach dynamic scheduling through the Federal Power Act route.

[01:09:21] Speaker 02:
Anything else?

[01:09:23] Speaker ?:
No.

[01:09:24] Speaker 04:
Thank you.

[01:09:25] Speaker 04:
Case is submitted.