[00:00:01] Speaker 00:
Phase number 20-1421, violation of MISO transmission customers et al petitioners versus Federal Energy Regulatory Commission.

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Mr. Engelman for the petitioners, Mr. Glover for the respondents, Mr. Supino for the interveners.

[00:00:17] Speaker 02:
Thank you.

[00:00:18] Speaker 02:
Council for petitioners.

[00:00:20] Speaker 05:
Good morning.

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I'd like to reserve two minutes for rebuttal.

[00:00:24] Speaker 05:
Michael Engelman for Petitioners, the Coalition of MISO Transmission Customers, the Industrial Energy Consumers of America, and LS Power Mid-Continent.

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The Petitioners, two organizations that represent large consumers of energy in the Mid-Continent region, which is a 15-state region,

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and a MISO approved qualified transmission developer filed a complaint under Section 206 of the Federal Power Act, challenging the continued justness and reasonableness of a cost allocation provision in the Mid-Continent region that prohibits regional cost accountability for baseline reliability projects.

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The prohibition on regional cost accountability flies in the face of long-standing cost causation principles.

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To support their complaint, the petitioners provided an analysis of 29 of those baseline reliability projects planned between 2013 when the prohibition on regional cost accountability was implemented through 2018.

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Before you get into that information, can I ask you a predicate question about standing?

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And that is, does your coalition

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of your coalition are the industrial and energy consumers.

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Do they have members in each of MISA's 24 pricing zones?

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They do.

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That's set forth on on JA 29 through 31.

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The coalition of MISO transmission customers.

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Let me catch up to you.

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JA 29 through 31.

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And that shows that you have it that says specifically that you have it and you have members in every zone.

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It says we have members throughout my so you mean by that in each in each zone in each zone exactly.

[00:02:18] Speaker 02:
Well, that's two different statements is it not throughout, and each.

[00:02:25] Speaker 02:
Well, the, I mean, specificity is key here.

[00:02:29] Speaker 05:
Specificity can be key in a standing argument, but in this case, the petitioners filed a complaint under section 206 of the Federal Power Act.

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And what they set forth was that they are harmed by the cost allocation provisions in MISO.

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They set forth for the coalition that their members are spread throughout MISO, that they use 8 billion kilowatt hours of electricity per year.

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And the industrial energy consumers set forth that they also, their members are throughout MISO, that their members are used 34% of the electricity consumed in MISO at a cost of $22 billion.

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Okay, council, large numbers is not the same.

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That's what we're trying to get at.

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And maybe you didn't offer that or your clients didn't offer it.

[00:03:29] Speaker 05:
Well, what we did offer is that- You're big.

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You're in the region.

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Where?

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Throughout the- How specifically?

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That's what we're looking for.

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I mean, I understand you file a 206 complaint.

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You don't like the fact that these projects are not subject to competition.

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I understand that as a general objection.

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Sure, and what the petitioners put forth again is that they are throughout the region.

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Did we specify that we're in each pricing zone?

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No, but what we provided were examples throughout each part of MISO.

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And what we set forth was that the petitioners were throughout MISO and include a non-incumbent transmission developer, which we'll get to in a minute.

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But Sierra Club, sorry.

[00:04:32] Speaker 03:
No, you should finish your sentence.

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I'm sorry.

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What Sierra Club says that is in most cases, the petitioner standing to seek a review of administrative action is self-evident.

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And if the complainant is the object of the action or inaction at issue, as is the case usually in the review of a rulemaking and nearly always in the review of an adjudication, there is little question that the action or inaction caused injury.

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In this case, we're raising it and we do that often.

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All right, because that's not an issue under Article 3 before the agency.

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And we've made it very clear in Sierra Club.

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And if there is any question and you acknowledge you haven't said in every.

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So that's all we're trying to get at council.

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You file a complaint, you don't like the way the operator is.

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limiting projects?

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But your honor's question presumes that in order for the provision that we challenge to be unjust and unreasonable, we would have to show that we're in every transmission pricing.

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No, it presumes that the Supreme Court's clapper decision means what it says.

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And the Clapper decision referred to an objectively reasonably likelihood of imminent harm.

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Because the petitioner is subject.

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I'm trying to get this distinction clear in my own mind.

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I apologize for interrupting.

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You can help me not simply by repeating throughout and things like that.

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The eminent harm is the cost allocation provisions are applied on a project by project basis and they prohibit the allocation of cost to anybody outside the zone in which a particular project is located.

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That's the LSP harm, but just backing up to the consumer's harm.

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I thought that was the consumer harm.

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That's the consumer harm.

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So part of it is you're saying more competition will necessarily lower prices and it'll be felt that way.

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So it's piggybacking on the harm to LSP as a non-incumbent developer.

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It is in part, but it's not exclusively because what the petitioners said is their members are harmed each time there's an improper cost allocation.

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That's what I was trying to go back to and just clarify that even

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The notion that there are members in every zone, I'm not sure establishes harm because maybe more of the energy consumed is consumed in zones where there is benefit, but not.

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price imposition for the development and that's the kind of thing that typically we see in a declaration when a case comes by petition to us is something that that really points to here's where we are and maybe we're inside of a zone where the benefits of the project are filled outside but we're shouldering all the cost we just don't know from the record before us where

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the big consumers in your clients, coalition and organization are.

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And therefore sort of the chapter and verse that supports the theory that the local pricing zone method more than the line outage method is gonna burden them.

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It may be depending on where they're located that they actually are some of the people who get a free ride.

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And your honor, that's exactly the point that we made in asserting our standing to challenge the cost allocation rules.

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In general terms, but not by identifying here's a consumer, here's where they're located, this is outside, this project restricts cost recovery, you know,

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or it's inside a pricing zone and the cost recovery is overburdening consumers within the zone.

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There's nothing, not even one explanation that's at that level of specificity.

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And so I think that's, I mean, theoretically, I understand your point.

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It's quite clear.

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But for purposes of that kind of standing, I'm not sure we have the information we need.

[00:09:16] Speaker 05:
Well, and we very much tried to provide you the information that was needed.

[00:09:23] Speaker 04:
Well, I thought you provided these studies that showed particular zones where they were really summed up to like 60% where the benefits were 60% elsewhere.

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So you have in your information identified some zones, not all of which are even challenged by.

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the information in front of us that showed some pretty disproportionate allocation of benefits.

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And so by telling us that you have members in every zone, you have sort of ipso facto identify that you have members who are cross-subsidizing the provision of benefits to people, substantial benefits to people in other zones.

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So that information is in the record before us.

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It just, it would have been helpful to have it all knit together in a declaration or something.

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But it's there in the record, right?

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We believe it's there in the record.

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And going back to Judge Pillard's point, what we pointed out regarding the individual allocations is that, and why a membership committee is the appropriate one to bring this is because she's exactly right.

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Some members are harmed,

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Some members are benefit, but the position that we've taken is that all members are harmed when there's improper cost allocation because these members are very energy intensive and they compete on a lot of things, energy prices being one of them.

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In fact, the Industrial Energy Consumers of America refer to themselves as energy-intensive industries that have trade issues.

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So we laid out that as an association, their reason to challenge this is that some members are harmed, some members are hurt, but everybody's harmed by inappropriate cost allocation.

[00:11:17] Speaker 02:
Now, where in the record did you identify

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the members who are hurt.

[00:11:27] Speaker 05:
Individual members, Your Honor?

[00:11:29] Speaker 02:
Exactly.

[00:11:30] Speaker 05:
We did not individual.

[00:11:32] Speaker 03:
Right, we don't know who they are.

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Are the individual members identified anywhere on the record?

[00:11:39] Speaker 05:
The individual members are not identified in the record.

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They're identified as large industrial users and the coalition of MISO transmission customers is actually a MISO member.

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They participate in all the MISO meetings as a MISO member representing these end users.

[00:11:57] Speaker 02:
Thank you.

[00:11:57] Speaker 02:
Anything further though that you'd like to point us to in the record other than these studies?

[00:12:02] Speaker 05:
I want to point to the competition piece of standing.

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For standing, you only need to find one petitioner has standing.

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LS Power has identified that it's a qualified transmission developer.

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This cost allocation regime prohibits us from competing for any of these projects.

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Associated Gas and U.S.

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Telecom both assert that competition is appropriate for standing.

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Typically on this side where there is a challenge to being cut out of competition, the petitioner will identify a project

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That is within, you know, for example in this situation where my so has some projects that it's that is treating as baseline reliability projects that were it not treating those as as local.

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LSP would bid on.

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There's nothing that specific in this record as they're identifying.

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Here's a project.

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And I'm thinking, I mean, you've read our 2017 LS power judgment.

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And if we apply that here, why isn't that equally fatal?

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because we identified 12 projects that we would have bid on, the 12 in the report that have significant benefits.

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And if the cost allocation allowed recognition of those benefits, those would have been competed.

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And this was also- Where can I find a statement such as a manager declaration or CEO declaration saying, we would have bid on these?

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these ones that are erroneously treated as local rather than regional.

[00:13:51] Speaker 05:
Again, we say that at JA 29 through 31 in JA 463 through 464, we refer to the results of competition and one of the three projects or two projects that MISO competed LS power one.

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So we've been consistent throughout that we compete on all projects and we've spent thousands of dollars to become qualified.

[00:14:16] Speaker 02:
Where does it say in the record in a sworn affidavit that

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it competes on all projects.

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I mean, council, you've given us percentages, et cetera.

[00:14:30] Speaker 02:
Maybe we should just hear from, do you want to say anything on the merits?

[00:14:34] Speaker 05:
I absolutely want to say some things on the merits, your honor, if you want to hear them.

[00:14:40] Speaker 02:
Well, I mean, you're not providing us any specificity in the record.

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So I thought, just so you have a chance to say what is not otherwise emphasized in your brief on the merits.

[00:14:51] Speaker 05:
Yes, on the merits, FERC's dismissal order didn't actually take on the evidence.

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The 12 projects that were identified, they never took on the percentages of costs that were inappropriately allocated.

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They simply said, well, it's okay.

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It's still mostly.

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For example, the court has no knowledge looking at JA46 on project 12112.

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as to why it's just and reasonable to allocate $65 million to Entergy Louisiana, 100% of the project costs, for a project when the neighboring utilities, CLECO and Lafayette, get 58% of the benefits.

[00:15:32] Speaker 03:
That flies in the face.

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Are you arguing an entire category has to fall because a subset of the projects don't

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primarily or have more than a day minimus effect outside or benefit outside the pricing zone.

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Is that your view that, I mean, it seems, just sort of to analogize, it seems like a facial attack.

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You're not saying, look, there's a subset of these that needs to be treated in a different category.

[00:16:03] Speaker 03:
The relief you're asking for is that the whole category is arbitrary and capricious, right?

[00:16:09] Speaker 05:
No, what we've asked for is that FERC set a just and reasonable rate that recognizes projects that have regional benefits.

[00:16:19] Speaker 02:
So that is a yes answer to the judge's question, is it not?

[00:16:24] Speaker 05:
Well, no.

[00:16:25] Speaker 05:
Judge Fuller asked if we were taking on the whole category.

[00:16:31] Speaker 02:
Well, how are you making it clear you're not?

[00:16:35] Speaker 05:
We made it clear in our section 206 request, on part two of the section 206, we suggested using the light-alloy distribution factor, but we also said that it's up to FERC.

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So the projects that have significant regional benefits can be addressed without, potentially,

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addressing those projects that only have modest spillover of benefits, which is what FERC represented was going to be the case.

[00:17:04] Speaker 05:
And what the Seventh Circuit relied on in affirming FERC is that there would only be a modest spillover of benefits.

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When you look at the individual projects, what modest spillover of benefits means could be open to debate.

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But for example, on one of the 2017 projects, there's a 0.005.

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that's a modest spillover of benefits, but there's also a 48% spillover of benefits, which is not modest.

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So FERC can address all of that on the second part of the Section 206.

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What we've argued is an absolute prohibition on any regional cost allocation for baseline reliability projects is inappropriate.

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Now, where the line is drawn is the second step of the Section 206, which FERC never got to.

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So FERC adopters have a categorical rule here.

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And let's imagine you had done a study.

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I know this isn't your study.

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And you had found one case where there was a misallocation of benefits.

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So they have a categorical rule.

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And you do a study and find one case where there's a 67%

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misallocation between benefits, 67% benefits, but they're not paying anything in that zone.

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The zone that is paying is only getting say the 33%, 33% of the benefits.

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Would that be enough to take down a categorical rule?

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Would that make the categorical rule unreasonable or you just have to have the ability to be able to challenge on a case by case basis?

[00:18:41] Speaker 05:
Well, it was challenged, that example was challenged in PSE and DV FERC 989 fed third 10, where a one project didn't fit the categorical analysis.

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A line out, not a line out distribution factor, that's what we used here, but a defects analysis, a distribution factor analysis was used.

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because of the particular type of project there, that analysis didn't properly allocate benefits to the beneficiaries.

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And so what FERC did in that case was make an exception in the category that says, well, for this type of project, if this type of project comes up in the future, we're going to implement a different cost allocation methodology.

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It didn't otherwise take the categorical rule down.

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It simply said when you've identified either individually or by some sort of subset, some common factor, then we can adjust.

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But it didn't indict the entire categorical rule.

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And again, that was one instance.

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What we've produced here are 12 instances where the... 12 out of how many?

[00:19:59] Speaker 05:
Well, 400.

[00:20:01] Speaker 05:
But the point is, I'm sorry, Your Honor.

[00:20:05] Speaker 04:
It's my sorry.

[00:20:07] Speaker 04:
Maybe you're about to answer with your point is what I'm trying to get to is how do we know when it's too many so that it indicts the categorical rule as opposed to those are just situations where the categorical rules.

[00:20:20] Speaker 04:
Pretty good.

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But there have to be sort of.

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opportunities for as applied challenges.

[00:20:27] Speaker 05:
I think, in this case, it's an easy answer because the categorical rule is a prohibition on any regional cost allocation.

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So in the other case, it was just an application of the rule.

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But here we have an absolute prohibition on any regional cost allocation.

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And that's the portion of the rule that's inappropriate.

[00:20:47] Speaker 03:
Go ahead.

[00:20:50] Speaker 05:
Sorry, that's what this court looked at in the... Sorry, in the...

[00:21:00] Speaker 05:
Sorry, the other case that I wanted to mention, the Old Dominion case.

[00:21:05] Speaker 05:
In that case, there was an absolute prohibition on any regional cost allocation.

[00:21:09] Speaker 05:
And in that case, there were only two projects that the court focused on to find that they provided benefits beyond the local zone and therefore took down a categorical exclusion.

[00:21:23] Speaker 05:
And that's the same thing that we have here.

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And in that case, just one other thing on the overlap of those cases, in that case, what the court looked at was the fact that the allocation methodology that the commission had approved as showing the just and reasonable beneficiaries was the one that was used to show that the categorical exclusion didn't work.

[00:21:50] Speaker 05:
And that's the same thing we did here.

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We used the line outage distribution factor methodology, which FERC had approved for MISO to use for years to show that the assumption that there would be only a modest spillover of benefits was inaccurate.

[00:22:06] Speaker 05:
And so therefore the absolute exclusion of any regional reliability was in, or excuse me, any regional cost allocation was inappropriate.

[00:22:16] Speaker 03:
Although FERC had moved away from that methodology and

[00:22:20] Speaker 03:
I know it didn't rely on that on any criticism of that methodology in the order here, but there is something a little anomalous about using the prior methodology that appears to have been rejected as at least not worth the candle and perhaps measuring the wrong thing.

[00:22:39] Speaker 03:
as a critique of the current rule.

[00:22:42] Speaker 05:
Two things.

[00:22:43] Speaker 05:
Actually, it wasn't rejected.

[00:22:45] Speaker 05:
It was just a 205 filing.

[00:22:47] Speaker 03:
It was superseded.

[00:22:48] Speaker 03:
It was superseded.

[00:22:49] Speaker 05:
But the bigger point is FERC hasn't moved away from it.

[00:22:52] Speaker 05:
If you look at paragraph 88 of the order, FERC relies on that very methodology to support that most of the time what is required works.

[00:23:01] Speaker 05:
And that's the same methodology that it relied on in 2013, and the same methodology that it required MISO to file informational reports on so FERC actually hasn't moved away from the methodology.

[00:23:14] Speaker 05:
And in fact, if you if you assert that the LODF methodology doesn't measure beneficiaries.

[00:23:20] Speaker 05:
then FERC's entire analysis for why it changed the cost allocation is out the window because that is the entire basis on which it changed it was that the LFDF methodology measures beneficiaries.

[00:23:35] Speaker 05:
Most of those beneficiaries are local and therefore it's appropriate to allocate all of the costs locally.

[00:23:42] Speaker 03:
I take your point.

[00:23:43] Speaker 03:
It's a good point.

[00:23:44] Speaker 03:
But I also think it's saying, you know, it measures beneficiaries.

[00:23:47] Speaker 03:
Maybe it over measures them.

[00:23:49] Speaker 03:
And even under that method, there's not a lot of spillover effect.

[00:23:57] Speaker 03:
And therefore, we're going to take a more categorical approach.

[00:24:00] Speaker 03:
But I take your point.

[00:24:02] Speaker 05:
And again, Your Honor, the problem with a categorical approach is that for baseline reliability projects, they're individually cost allocated.

[00:24:13] Speaker 03:
Well, so the question I have is, you know, why are you not again and this is a standing point, but maybe also getting to this issue of sort of as applied versus versus facial Why are you not saying look, here's a project that is on deck, and it has.

[00:24:35] Speaker 03:
benefits outside the pricing zone and I want to compete for it.

[00:24:39] Speaker 03:
Like there's nothing that concrete.

[00:24:41] Speaker 03:
And so it's just hard to know.

[00:24:42] Speaker 03:
I mean, one of the things that FERC says is these are hypothetical and, you know, are any of them embraced within a planning process that then you can step forward and say, we are already willing and able to do this project.

[00:24:56] Speaker 03:
And it is representative of a broader problem.

[00:24:59] Speaker 03:
For standing purposes, that would be extraordinarily helpful.

[00:25:03] Speaker 03:
And in terms of highlighting the scope of remedy that you're seeking, also helpful, but that's not what you've done.

[00:25:13] Speaker 05:
It's not what we've done for this reason.

[00:25:16] Speaker 05:
What we did was take projects over a number of years and show that this problem continues to happen.

[00:25:24] Speaker 05:
Three projects in 2017, two in 2018, and ask for a change moving forward with 2019 so that those projects could be competed.

[00:25:33] Speaker 05:
The problem with focusing on individual projects is twofold.

[00:25:37] Speaker 05:
One is the project goes on.

[00:25:40] Speaker 05:
So even if we file a complaint that the cost allocation is wrong, the opportunity to compete has gone by the wayside.

[00:25:46] Speaker 05:
The project's been aside, it's moved on.

[00:25:49] Speaker 05:
The cost allocation may get fixed later on down the road, but the opportunity to compete has been lost.

[00:25:55] Speaker 05:
And the consumers are very adamant that the opportunity to compete is an important part of their complaint.

[00:26:01] Speaker 05:
at JA 670, or excuse me, 470, what the consumers noted was that competition just on the couple projects that's happened has brought them better results than five years of litigation on ROE.

[00:26:17] Speaker 04:
The ROE is- Okay, now, so we understand.

[00:26:19] Speaker 04:
I actually have a follow-up question, Judge Rogers, is that okay?

[00:26:22] Speaker 04:
Oh, go ahead.

[00:26:23] Speaker 04:
So, I know that this was a 206 petition and that

[00:26:28] Speaker 04:
There had been an original challenge to the rule, the Seventh Circuit case.

[00:26:33] Speaker 04:
But if you had a standing rule that said, even when FERC adopts a categorical prohibition on competition, in order to petition, you have to identify a specific project.

[00:26:48] Speaker 04:
How would that work since you only, in that situation, which is a little different from here, but in that situation, you only have 60 days to file your petition after

[00:26:56] Speaker 04:
FERC announces a rule with a categorical prohibition on competition.

[00:27:01] Speaker 04:
It seemed to me a rather difficult situation.

[00:27:04] Speaker 04:
You didn't have a category in our unpublished LSP case.

[00:27:08] Speaker 04:
We didn't have a categorical prohibition like this one.

[00:27:11] Speaker 04:
So it does seem to be a bit odd to say you've got 60 days to find a project where you can't challenge the rule at all.

[00:27:18] Speaker 05:
And actually in LSP, one piece of that claim was a potential categorical exclusion down the road for what are known as... Well, that was part of the problem there.

[00:27:30] Speaker 04:
Exactly.

[00:27:30] Speaker 04:
That's very different from this situation, though.

[00:27:33] Speaker 04:
I know we're not doing the original challenge to the rule, but if we adopt a standing theory here, presumably would apply in that situation.

[00:27:42] Speaker 04:
I think when you have categorical prohibition, like you said, that's what you're challenging here.

[00:27:48] Speaker 04:
We have to assume you're right on the merits of this stage for purposes of assessing standing be quite hard for someone to identify a project within 60 days.

[00:27:58] Speaker 04:
You tell me, I don't know.

[00:28:00] Speaker 04:
Maybe you can find out.

[00:28:01] Speaker 05:
I don't know.

[00:28:02] Speaker 05:
Well, I think what we tried to do, Your Honor, is to identify 12 projects that have passed that would have fit the bill.

[00:28:10] Speaker 04:
Right.

[00:28:11] Speaker 04:
Well, you were doing a longer period of time.

[00:28:12] Speaker 05:
Right.

[00:28:13] Speaker 05:
But we asked for a change in 2019.

[00:28:15] Speaker 05:
Now, part of the difficulty in Judge Pillard's question is filing a complaint is we don't have the models to know which ones have the big spillover of benefits.

[00:28:28] Speaker 05:
And so MISO, because they're now using this location-based cost allocation, doesn't release the models till after the fact to show which projects have the benefits that go beyond the zone.

[00:28:41] Speaker 05:
So we're going to be hamstrung to wait for the models.

[00:28:44] Speaker 05:
In our case, we put in the complaint that the models were supposed to be out in February.

[00:28:49] Speaker 05:
They didn't come out while we were litigating that complaint.

[00:28:53] Speaker 04:
So the ability- Have they come out yet?

[00:28:55] Speaker 05:
They have come out now.

[00:28:57] Speaker 04:
It was after, was it while it was still before FERC or after FERC?

[00:29:01] Speaker 05:
I do not believe it was while it was still before FERC.

[00:29:04] Speaker 04:
Was it before you filed your petition here?

[00:29:07] Speaker 05:
Sure, because the FERC case took a while.

[00:29:11] Speaker 02:
So I guess the point in this area would be, would it not, that an affidavit spelling all this out

[00:29:26] Speaker 02:
of impossibility would have helped, but that's not here.

[00:29:35] Speaker 02:
And furthermore, these projects don't appear overnight.

[00:29:39] Speaker 02:
They take years of development.

[00:29:42] Speaker 02:
Your client is a big operator, probably knows what's coming on board for the next decade.

[00:29:51] Speaker 02:
And there are many ways

[00:29:58] Speaker 02:
to indicate that Project X is something we would want to compete for.

[00:30:08] Speaker 02:
That's what I don't understand, why that's impossible.

[00:30:12] Speaker 02:
And there's nothing in the record to say it is impossible.

[00:30:16] Speaker 05:
And your honor, at the risk of repeating myself, we've represented that by becoming qualified, by paying thousands of dollars to become qualified, by submitting hundreds and hundreds of pages of records to get qualified to compete on any project that MISO competes.

[00:30:35] Speaker 02:
With all due respect, counsel, you know, this court is a lower court.

[00:30:41] Speaker 02:
So help us out.

[00:30:44] Speaker 02:
And finding

[00:30:46] Speaker 02:
the sort of standing as the Supreme Court has tightened its standing requirements.

[00:30:58] Speaker 05:
And we believe that we fully have met those requirements.

[00:31:03] Speaker 05:
These are not someday intentions of Sierra Club.

[00:31:06] Speaker 02:
Why don't we hear from counsel for respondent?

[00:31:15] Speaker 02:
Counsel for respondent?

[00:31:17] Speaker 07:
Thank you, your honor.

[00:31:18] Speaker 07:
May it please the court.

[00:31:19] Speaker 07:
I'm Matthew Glover and I represent respondent, the Federal Energy Regulatory Commission.

[00:31:24] Speaker 07:
If it's all right with the court, I'd like to start with something that I think was in the middle of Mr. Engelman's discussion where he was talking about challenging the category and providing evidence that there's only a modest spillover.

[00:31:35] Speaker 07:
The first point I'd make on that, which is actually technically jurisdictional and maybe I didn't do a great job in the brief and pointing out that collateral attacks are jurisdictional,

[00:31:43] Speaker 07:
But in the 2013 and 2014 order and the 2014 rehearing order that culminated in the seventh circuit proceeding parties including LS power specifically argued that, and I hate to read but I do think it's helpful to read from paragraph.

[00:31:59] Speaker 07:
I guess I've misplaced it 521 of the 2013 order, the commission explained that protesters argued that because a portion of the costs of some baseline reliability projects were then under the line outage method, being allocated to the pricing zones, other than the pricing zone in which the project is located.

[00:32:17] Speaker 07:
Some baseline reliability projects provide benefits outside of the zone, and thus the costs are not allocated roughly commensurate with the benefits.

[00:32:25] Speaker 07:
It's 521 of the 2013 order, which we cited in our brief and I think we.

[00:32:34] Speaker 07:
This part of it in our brief, maybe around 38 but the 2013 orders for citation is 142 for paragraph 61 comma 215.

[00:32:45] Speaker 07:
And I guess just the point is that parties they are including ls power had argued that the fact that there would be using the line outage method.

[00:32:53] Speaker 07:
Any some projects, any one project might have had their benefits spread between zones showed that it wasn't just unreasonable and didn't comport with cost causation to switch to a categorical method.

[00:33:02] Speaker 07:
The commission was unequivocal.

[00:33:04] Speaker 07:
We disagree.

[00:33:04] Speaker 07:
The commission must demonstrate that there's an articulable, plausible reason to believe that costs will be allocated, at least roughly commensurate with benefits.

[00:33:12] Speaker 07:
As we found above, they call them MISO there, but what we use Mid-Continent has presented convincing support for its claim that the pricing zone in which a baseline royalty project is located

[00:33:21] Speaker 07:
receives most of the benefits provided by that project, and therefore we find assigning all of the associated costs to that pricing zone results in an allocation of costs that's roughly commensurate to the distribution.

[00:33:31] Speaker 04:
But I think what they're saying here is, look, now we've got experience and information, and you've got arguments on that.

[00:33:38] Speaker 04:
We've got experience and information both in the number or the volume of projects, and there's debates about that, but volume, the sheer volume of projects where there's a misallocation in their view.

[00:33:48] Speaker 04:
Plus, something that was emphasized heavily to the Seventh Circuit is, don't worry, when there's something that's regional, it'll be called a multi-value project and they'll be able to be.

[00:34:01] Speaker 04:
And there'll be these, and these other sources, so they will, there's these other things that didn't materialize.

[00:34:07] Speaker 04:
In fact, you already knew it hadn't materialized at the time you told the Seventh Circuit that, right?

[00:34:12] Speaker 04:
I mean, three or four years had passed by the time, three years, I guess, had passed by the time you told that to the Seventh Circuit, not you personally, to the Seventh Circuit.

[00:34:21] Speaker 04:
I mean, they must, the answer is we aren't gonna have those projects because we already had a glut of things that have been pre-authorized.

[00:34:27] Speaker 04:
You knew that long before commission

[00:34:29] Speaker 04:
forgive me, knew that long before they assured the Seventh Circuit there'd be all these opportunities for competition.

[00:34:36] Speaker 07:
So I think there's two parts to your question going to the merits of their change circumstances.

[00:34:40] Speaker 07:
The first is the evidence post the 2013 and 14 proceedings, and the second is the multi-value projects.

[00:34:46] Speaker 07:
If I might, I'll start with the evidence after the 2013-14 proceeding and then address the multi-value projects, unless you'd prefer that I start with multi-value.

[00:34:53] Speaker 04:
Well, you were sort of saying, trying to make this a collateral attack.

[00:34:57] Speaker 04:
And what I'm saying is that in two ways, they say it's not a collateral attack.

[00:35:01] Speaker 04:
And so I don't know if you want to, I'm not,

[00:35:05] Speaker 04:
yet yet raising the question of the merits issues there but simply that in fact to the extent we're trying to raise collateral attack as a jurisdictional point they've got two distinct arguments here and I guess what I'm more interested in is is why did the FERC emphasize so heavily to the seventh circuit that don't worry there's all these multi-value and other projects coming for which they'll be able to compete

[00:35:27] Speaker 04:
when even by 2016 that argument was, you already knew about the glut of pre-authorized projects.

[00:35:35] Speaker 04:
You knew nothing was coming down the line.

[00:35:38] Speaker 04:
So why did they tell the 7th Circuit that if in fact the very reasons we're now told for there not being those multi-value projects were already known and well and long in existence at the time of the 7th Circuit argument?

[00:35:51] Speaker 07:
Understood your honor starting with the collateral attack.

[00:35:54] Speaker 07:
I only meant that the argument that the existence of any project that would have cost sharing means that sort of the facial categorical attack is identical to the facial categorical attack they made there as to the merits of a change circumstances argument on the multi value projects.

[00:36:08] Speaker 07:
I don't think the commission hid the existence of the $6.75 billion portfolio that I believe was approved in 2011.

[00:36:15] Speaker 07:
In fact, I think it's paragraph 502 of the 2013 order.

[00:36:18] Speaker 07:
The commission mentions that that portfolio eliminated the need for 23 baseline reliability projects.

[00:36:25] Speaker 07:
Here in paragraph 89, the commission says, we predicted that there would be a lot of multi-value projects and we credit mid-continent's explanation for why that hasn't occurred, which includes the large portfolio that was approved in 2011.

[00:36:38] Speaker 07:
I understand it's still being constructed or just being completed construction, but it also includes things like

[00:36:43] Speaker 07:
the change in natural gas pricing and the change in inputs and the retirement of some facilities, that affects the economics of whether it's- How much of that was known at the time of the Seventh Circuit case?

[00:36:54] Speaker 04:
And how much of it is since then?

[00:36:56] Speaker 07:
I think at the time of the Seventh Circuit case, the- The blood was.

[00:36:59] Speaker 07:
The portfolio was known.

[00:37:00] Speaker 07:
And in the Seventh Circuit case, and I'm not sure if we put it in our appellate filings, but it was certainly mentioned in the 2013 order.

[00:37:06] Speaker 07:
I believe it might've been the 2014 review.

[00:37:08] Speaker 04:
Right, but it wasn't really emphasized to the Seventh Circuit at all.

[00:37:10] Speaker 04:
Sure.

[00:37:11] Speaker 07:
That it was that it eliminated the need for 23 baseline reliability projects during that period.

[00:37:16] Speaker 07:
And that was a period prior to the mid content South integration so that elimination of 23 projects would have been a larger percentage of say the baseline reliability projects that were occurring per year back at that time.

[00:37:28] Speaker 07:
The Commission's broader point as to compliance with order 1000 both in that proceeding and here is that order 1000 doesn't require you to have a

[00:37:36] Speaker 07:
category that would include reliability projects that you'll cost share that is always going to sort of displace baseline reliability projects, we predicted that it would displace them, you know, that prediction hasn't played out but in paragraph 89 here we credited mid continents explanation for why there haven't been more multi value.

[00:37:53] Speaker 04:
I understand why you've done that now I'm confused as to why how the seventh circuit was led to believe and seem quite.

[00:38:00] Speaker 04:
assured in their decision and at oral argument that these other opportunities for competition were going to be there that never materialize.

[00:38:07] Speaker 04:
It seems a bit troubling.

[00:38:09] Speaker 04:
It certainly includes an argument about a collateral attack here now that they've got more information.

[00:38:15] Speaker 07:
I don't think it would preclude an argument that categorically you can't eliminate cost sharing if only one project were to have cost sharing.

[00:38:22] Speaker 04:
No, but they're not arguing if only one.

[00:38:25] Speaker 04:
They're not argued if only one.

[00:38:26] Speaker 04:
We can put through debates about how many examples they've shown that are viable, but they're not saying, I mean, I asked them a prior argument if there's just one, but that's not their argument.

[00:38:37] Speaker 04:
Now, I think, I assume FERC would agree if, even they don't say this is this case, but if it turned out that 50% of the projects had more than 50% misallocation between costs and benefits,

[00:38:53] Speaker 04:
that that could be raised later and it wouldn't be considered a categorical attack, is that you just can't have your categorical rule when half the time it's wrong, right?

[00:39:03] Speaker 07:
So that would be, I think, evidence of changed circumstances.

[00:39:06] Speaker 07:
And if I might address the evidence of changed circumstances, they keep noting that the Seventh Circuit described it as a modest spillover.

[00:39:12] Speaker 07:
And we discussed the statistics and the updated statistics in page 32 to 33 of our brief.

[00:39:18] Speaker 07:
But in preparing for argument, I realize it may have been more helpful for me to have put a chart in there

[00:39:23] Speaker 07:
that showed, because at the time of the 2013 order- Well, it would have been helpful if FERC could put a chart in its decision, but it didn't.

[00:39:28] Speaker 04:
It's a little hard for you to do it for them, right?

[00:39:31] Speaker 07:
Fair enough, Your Honor.

[00:39:32] Speaker 07:
But at the time of the 2013 decision that was looking at the planning cycles before that, FERC noted that 80% of the baseline reliability projects would have had 75% of their costs had, because they were applying the line management, had 75% of their costs allocated locally.

[00:39:50] Speaker 07:
And in the informational filings that FERC required from midcontinent.

[00:39:54] Speaker 04:
20% is a lot.

[00:39:54] Speaker 04:
20% is a lot.

[00:39:56] Speaker 07:
Well, so that's the spillover that the Seventh Circuit described as modest.

[00:40:00] Speaker 07:
It was 80% of projects having 75% or more allocated locally.

[00:40:06] Speaker 07:
When the Seventh Circuit used modest, it was describing that the statistics that we had and midcontinent had put before them were that.

[00:40:13] Speaker 07:
And that the second statistic from that time was that

[00:40:17] Speaker 07:
more than half of the projects had 90% or greater allocated.

[00:40:21] Speaker 04:
I know, but more than half could be 51%.

[00:40:24] Speaker 07:
And that's why I want to point to the informational filings that MidContent did in 2016 and 17 that we have in front of us in this record.

[00:40:31] Speaker 07:
Those showed that for, again, in 2013, the statistic was that 80% of projects would have 75% or more allocated.

[00:40:39] Speaker 04:
Where does FERC rely on that in its decision?

[00:40:41] Speaker 07:
At J.A., or paragraph 88, I think it's J.A.

[00:40:47] Speaker 07:
532, the description of these updated informational filings, and I think it's 532, but I'm looking at a non-J.A.

[00:40:57] Speaker 07:
paginated program.

[00:41:00] Speaker 07:
It showed that 80% of projects would have had 100% of their costs allocated locally.

[00:41:06] Speaker 07:
At the time of the seventh circuit or the evidence in the seventh circuit proceeding showed 80% of projects would have 75% allocated locally.

[00:41:12] Speaker 07:
The next two years analyzing the 130 projects approved in those two years, 80% would have 100% allocated locally.

[00:41:20] Speaker 07:
And then the second part of that statistic was that of the projects that would have been eligible for cost sharing at all, 93.9% or 46 of 49 would have retained 75% locally.

[00:41:33] Speaker 07:
So you went from retaining 75% locally

[00:41:36] Speaker 07:
for 80% of the projects to 93.9.

[00:41:38] Speaker 07:
So if anything, the change circumstances that those informational filings showed was that there was less fewer projects having spillover and fewer projects having percentages, large percentages of spillover.

[00:41:50] Speaker 07:
So in terms of the change circumstances, the record here suggests that there's- Okay, but then they had their, so that's a very fair point.

[00:41:57] Speaker 04:
They had their, is it pronounced Terra report or is it the Terra?

[00:42:02] Speaker 07:
I actually don't know.

[00:42:04] Speaker 07:
I've been calling it Fatera.

[00:42:05] Speaker 04:
Do I see a nod to Fatera over there?

[00:42:06] Speaker 04:
All right, I'm going to call it the Tera report right now.

[00:42:09] Speaker 04:
If that's OK, I'll be correct.

[00:42:12] Speaker 04:
I'm happy to stand corrected.

[00:42:14] Speaker 04:
And all I got from FERC is that the meaning and findings are mixed.

[00:42:21] Speaker 04:
The sample of projects is highly selective.

[00:42:23] Speaker 04:
I don't know what that means, other than people tend to do reports that show what it is they want it to show.

[00:42:28] Speaker 04:
And then the NISO makes compelling arguments.

[00:42:32] Speaker 04:
but doesn't identify which of the arguments it's adopting, only that MISO makes compelling arguments that it may contain significant errors.

[00:42:41] Speaker 04:
What am I supposed to do with that as a response to this evidence about the terror report?

[00:42:47] Speaker 04:
That's pretty vague.

[00:42:51] Speaker 04:
And they can't be adopting all of MISO's arguments because MISO was

[00:42:54] Speaker 04:
saying just don't use the line method anyhow.

[00:42:58] Speaker 04:
And we know FERC has not let go of that yet.

[00:43:02] Speaker 04:
So he's not sure what to do with this.

[00:43:06] Speaker 07:
Sorry, and I know I'm in the red light, but if the if it's okay with the quarter I'll answer your question.

[00:43:12] Speaker 07:
I think that the commit, I guess, stepping back the point of this proceeding is that it's a section 206 proceeding and so.

[00:43:20] Speaker 07:
The petitioners coalition etc had the burden of showing that the circumstances had so changed since the 2013 and 14 proceedings and the seventh circus 2016 ruling that.

[00:43:31] Speaker 07:
using the current local cost allocation, which was found to be just and reasonable, is no longer just and reasonable.

[00:43:36] Speaker 07:
So they had this significant burden of showing that what was just and reasonable a few years ago is no longer.

[00:43:42] Speaker 07:
They presented these 12 projects as we noted.

[00:43:44] Speaker 07:
They looked at 31 total, I guess, and that was highly selective.

[00:43:48] Speaker 07:
Four of those were not actually baseline reliability projects.

[00:43:51] Speaker 07:
And, you know, I think the statement that the value and meaning of the material report is mixed and mid continent has contrary evidence is essentially to say, you had a significant burden to show there were such changed circumstances that the current cost allocation is no longer just reasonable and their evidence identified some projects that had were, I think, 5060 and 65% of the costs were misallocated.

[00:44:14] Speaker 04:
And those weren't ones that.

[00:44:16] Speaker 04:
MISO's other, you know, more particularized arguments knocked out.

[00:44:20] Speaker 04:
Those ones were left standing even with the so-called the information that the commission references here that MISO made.

[00:44:28] Speaker 04:
And I assume that commission's position isn't that 50, 60, 65 percent is a modest spillover.

[00:44:36] Speaker 07:
You know, the commission didn't address that again the modest number of projects having spillover, but I think the problem and this goes back to the sort of, I believe was judge player was asking whether it was an as applied or facial tech, they're saying that using this model is unjust and unreasonable.

[00:44:52] Speaker 07:
And we had found that with those previous percentages of projects having spillover, it was still just unreasonable to to switch to this model and so identifying, I think you noted three percentage or three projects, I'll say, identifying those three projects, given everything else in the record the commission did not find that this report the the terror for terror report.

[00:45:13] Speaker 07:
met their burden of showing what was just and reasonable, merely a couple years ago is no longer and so they didn't challenge, you know, this specific project is definitely going.

[00:45:22] Speaker 04:
That's fine.

[00:45:22] Speaker 04:
So that's what I want to clear up if I can because they say look, we're challenging the fact that you have a flat prohibition, and that you, you know, I guess their view is be that you should have something that

[00:45:34] Speaker 04:
wouldn't be such a flat prohibition.

[00:45:36] Speaker 04:
It would be more context specific.

[00:45:39] Speaker 04:
Does the commission agree?

[00:45:40] Speaker 04:
And I understand there's all kinds of arguments for why we want to have a more administrative upfront rule.

[00:45:47] Speaker 04:
Does the commission dispute that if someone were to come in and say, here's a project and whatever method of measurement you want to use, guess what happens?

[00:45:59] Speaker 04:
It's off by 65%.

[00:46:03] Speaker 04:
that someone could bring that focus, that as applied challenge to that project and FERC would entertain it.

[00:46:13] Speaker 04:
Or would it say, too bad, that's what categorical rules are for.

[00:46:19] Speaker 07:
Your honor, I think, obviously there might be issues in terms of standing, et cetera, but I think if you are a rate payer currently paying the costs of some project and you allege that that project was grossly disproportionate, you would file a section 206 proceeding and say, I'm a rate payer, my current rates are.

[00:46:36] Speaker 04:
I'm not asking what they would do.

[00:46:37] Speaker 04:
I'm asking whether FERC would recognize that as a valid challenge or would they go, what part of categorical don't you understand?

[00:46:49] Speaker 07:
I assume that the commission wouldn't entertain that, but I can't think of a specific case that involved that type of challenges in my experience with the commission.

[00:46:57] Speaker 04:
Then we have the problem of if we're unsure whether they could do that, then this really does become an argument about whether you can have that rigid a categorical rule would certainly cause trouble for the commission and Old Dominion.

[00:47:17] Speaker 04:
through all the distinctions on that case but what happened there is you had a rule something was swept in and it shouldn't have been and the argument in my hypothetical is this project was swept in and it shouldn't have been because it's so misallocated and it seems different if they have to show that if you treat them like we would and this may be the wrong analogy was sort of facial versus as applied challenges then that's fine that's one thing

[00:47:42] Speaker 04:
But if the commission's categorical rule is, I don't care if it's misallocated 99% benefits, and you have customers identified with affidavits complaining, and LS there with its paperwork ready to compete, we're going to say, tough luck, that's what a categorical rule means, then I think that looks like a different categorical rule than maybe the one the Seventh Circuit thought it was looking at.

[00:48:09] Speaker 07:
So I think a customer certainly can come forward and say the rates I am paying are not just unreasonable.

[00:48:14] Speaker 07:
And here is why I'm paying the costs for this baseline reliability project in the zone that I live that occurs.

[00:48:20] Speaker 07:
But the benefits are outside, et cetera, et cetera.

[00:48:23] Speaker 03:
And then the commission would have to- Why isn't that this case with the industrial consumers?

[00:48:28] Speaker 07:
Because they haven't alleged, they're not seeking to change the cost allocation of any of those specific projects.

[00:48:33] Speaker 07:
I think the response I was giving to Judge Millett is if you were alleging your current rate was unjust and reasonable because this specific project that you were paying for.

[00:48:41] Speaker 07:
I think the hypothetical she gave me was a project where it was 99%.

[00:48:45] Speaker 07:
But you were a rate payer for that specific project because, I'll call it hypothetical project A, let's say it's in the Excel zone.

[00:48:51] Speaker 07:
You said, I'm in the Excel zone and I'm currently paying for it.

[00:48:54] Speaker 07:
an old project I previously paid for that the rates I'm currently paying for this project and my current rate is unjust and unreasonable because I'm paying for this excel project that really has 99% benefits elsewhere.

[00:49:05] Speaker 04:
Is there even a workable way to do it though?

[00:49:07] Speaker 04:
I mean are the consumers or even someone who wants to compete going to have the information in a timely manner to challenge if there is a FERC authorization that project?

[00:49:18] Speaker 04:
I'm not sure they're challenging.

[00:49:19] Speaker 04:
They can't you say they can't challenge the

[00:49:21] Speaker 04:
tariff writ large, to the extent it includes this categorical rule.

[00:49:25] Speaker 04:
And so what would be timely?

[00:49:29] Speaker 04:
Can they bring that any time they finally get the information at hand about how these things are misallocated?

[00:49:35] Speaker 07:
You know, I confess, I don't know if if the cost of these projects, particularly the more expensive ones, I assume are going to be cost allocated over a few years of rates.

[00:49:43] Speaker 07:
So I think you would have a window.

[00:49:44] Speaker 07:
But, you know, is it a timely window?

[00:49:46] Speaker 04:
I don't know what's the time.

[00:49:47] Speaker 04:
I mean, I just I just I don't I don't want to be told that there's a solution here that doesn't actually exist in reality.

[00:49:53] Speaker 07:
So I don't know sort of what the timeliness of that would be.

[00:49:56] Speaker 07:
But again, if you're challenging our categorical rule as a facial matter, you needed to show change.

[00:50:02] Speaker 04:
I just want to accept that.

[00:50:03] Speaker 04:
I'm sorry, can I just clarify this?

[00:50:05] Speaker 04:
Yeah, absolutely.

[00:50:06] Speaker 04:
You say as a facial matter that what the commission is adopting is this what we use as courts and other contacts between what they're saying now is, well, our categorical rule is facially valid.

[00:50:17] Speaker 04:
You can't show it's wrong.

[00:50:19] Speaker 04:
It's certainly right in many circumstances, maybe most, is what the commission would say.

[00:50:24] Speaker 04:
Didn't say, most of the time it's right.

[00:50:28] Speaker 04:
But that never precludes an as applied challenge.

[00:50:33] Speaker 04:
And people could come in project by project and say, and I'm sure they'll fight about what the right number is for a misallocation, but let's say, we'll just say that over 50%, that's hard to call a modest spillover.

[00:50:47] Speaker 04:
As to those projects and say, you can't apply the category for world to this project just like you couldn't an old dominion you can't do it here because it's it's causing the rates.

[00:50:58] Speaker 04:
this point for this project to be unjust and unreasonable.

[00:51:04] Speaker 04:
And the commission's not going to say money's fungible and you're paying for lots of things.

[00:51:07] Speaker 04:
Your rate reflects a lot of different factors all at once.

[00:51:09] Speaker 04:
No one has a rate just for one project.

[00:51:12] Speaker 04:
And we said it was categorical.

[00:51:14] Speaker 04:
And the hard thing about categorical lines, bad things fall within them.

[00:51:18] Speaker 04:
That's not the commission's view.

[00:51:20] Speaker 04:
They are of the view when you said facial that there could be an as applied challenge.

[00:51:24] Speaker 07:
You know, I assume, particularly as you laid out the hypothetical again the rate payers then currently paying some rated and I don't think the commission would say well your rate includes a lot of things, because this is a cost based rate so it would actually, I believe, specify like what you're paying for this project or the not necessarily you the the individual transmission customer but all transmission customers in that zone.

[00:51:43] Speaker 07:
So, I do think that the rate structure would provide for that sort of as applied challenge.

[00:51:50] Speaker 07:
Again, the challenge here was to show that the commission's cost allocation methodology is no longer just and reasonable question about that.

[00:51:57] Speaker 03:
You agree that.

[00:52:01] Speaker 03:
the current method only works most of the time, and you seem to take the position that that is good enough.

[00:52:08] Speaker 03:
In the reply, Mr. Engelman argues that cost causation can, it's permissible for cost causation to be imperfect, to meet other policy objectives.

[00:52:19] Speaker 03:
That seems to be what the precedent allows.

[00:52:21] Speaker 03:
What was the other policy objective that FERC was identifying here?

[00:52:28] Speaker 03:
in embracing this treatment of baseline reliability projects over the line outage.

[00:52:36] Speaker 07:
I think I have a couple of responses to that.

[00:52:38] Speaker 07:
The first one is the commission, it was in the 2013 proceeding and 2014 proceeding, the commission was making the determination that local cost-based allocation for baseline reliability projects was just and reasonable.

[00:52:49] Speaker 07:
And I don't take the commission in the order, and I certainly didn't mean to say that local cost allocation is right most of the time.

[00:52:57] Speaker 07:
The commission said in the 2013 order,

[00:52:59] Speaker 07:
and reiterated here that it had said in the 2013 order that because reliability concerns on local systems are what lead to or cause the burden to create baseline reliability projects, it thought local allocation of baseline reliable projects then was just and reasonable and continues to be just and reasonable as to sort of the additional, I think, factors or which is the language from Carnegie Gas and the 1982 case and a handful of other cases talking about when you can pick between different methodologies.

[00:53:25] Speaker 07:
That wouldn't have been at issue here because the question here was whether

[00:53:29] Speaker 07:
what had already been approved continued to be just and reasonable, or whether new evidence showed that it wasn't.

[00:53:34] Speaker 07:
I think in looking at the 2013 and 2014 proceedings, I looked at the orders, you know, the Commission emphasized, and I guess we did note that Mid-Continent put similar evidence in here,

[00:53:44] Speaker 07:
that they put in evidence that it's a local transmission provider who is causing the need for a baseline reliability project.

[00:53:52] Speaker 07:
The project's fix is usually on one or a couple of their systems or lines that will be within their footprint.

[00:53:59] Speaker 07:
And so they provided testimony here, which was similar to what they had said in the previous case, that local cost allocation recognizes that the purpose of these projects is to solve a local reliability violation or a violation of the national standards.

[00:54:14] Speaker 07:
occurring on a local or specific entities units.

[00:54:19] Speaker 07:
But here we were being asked, have petitioners met their burden to show that the circumstances have so changed that what was just and reasonable a few years ago is no longer just and reasonable?

[00:54:29] Speaker 07:
And the commission said that they didn't meet their burden.

[00:54:31] Speaker 07:
That's where the language Judge Mollett and I were discussing about the TARA report being.

[00:54:36] Speaker 03:
Right.

[00:54:37] Speaker 03:
What about the problem that

[00:54:39] Speaker 03:
FERC in the 2013-2014 proceeding relied on the prospect that MEPs and MVPs would displace BRPs, but that just hasn't happened.

[00:54:48] Speaker 03:
I mean, we've seen a slew of these cases, and Mr. Engelman is in many, if not all of them, where

[00:54:55] Speaker 03:
There's sort of a calling out of the commission for an order 1000 saying we're going to do a lot more competition and that's going to be good for repairs that's going to bring prices down and then it seems like almost everywhere we turn whoops no competition here no competition there no competition everywhere.

[00:55:14] Speaker 03:
Is there some way you can help us understand why this isn't just sort of undermining the premise

[00:55:20] Speaker 03:
I mean, I appreciate the legal arguments in each individual case.

[00:55:24] Speaker 03:
But can you give us any sort of more big picture assurance about the situation?

[00:55:30] Speaker 07:
Your Honor, I've been focused mostly on the baseline reliability projects.

[00:55:34] Speaker 07:
I know that the companion case is going to talk about the exception for immediate need reliability projects.

[00:55:41] Speaker 07:
But I think FERC did note, at least here, as to competition that I think it's footnote 254.

[00:55:47] Speaker 07:
And sorry, I don't have the JA page.

[00:55:50] Speaker 07:
that in the orders, which you'll discuss in the next case, like they were lowering the voltage for market efficiency projects, which in theory will lead to more competitive projects.

[00:56:01] Speaker 07:
But as to the lack of multi-value projects and competition since the 2011 $6.5 billion portfolio that's still being put in, the commission said in

[00:56:12] Speaker 07:
believe it's paragraph 89 that you know they credited mid-continent explanations which included the the different fluctuating prices of gas etc and I know I've already discussed that and I'm into the red light so I don't mean to sort of retread anything but on the broader question you know I'm not sure that I have anything from the record in this proceeding or that I've sort of delved deeply into that my

[00:56:37] Speaker 07:
I don't want to throw my colleague under the bus.

[00:56:38] Speaker 07:
She has more experience at the commission than I do.

[00:56:40] Speaker 07:
And I know you had a case last week dealing with the immediate need of reliability exception in the New England system.

[00:56:49] Speaker 07:
So I don't want to speak to issues in those cases.

[00:56:52] Speaker 07:
All right.

[00:56:53] Speaker 01:
And I apologize.

[00:56:54] Speaker 01:
I don't have a better answer.

[00:56:56] Speaker 04:
Let me ask one more question then.

[00:56:57] Speaker 04:
Do you dispute that the coalition and industrial energy consumers have members in each MISA pricing zone?

[00:57:04] Speaker 07:
I did not see that in the record.

[00:57:06] Speaker 04:
I mean, I should have thought FERC would know a lot about these folks by now, but maybe not.

[00:57:11] Speaker 04:
Maybe that's my fault.

[00:57:12] Speaker 04:
FERC wouldn't care, I guess.

[00:57:14] Speaker 04:
I didn't question.

[00:57:16] Speaker 07:
I don't think that we know that from the record here.

[00:57:19] Speaker 07:
I think they describe the coalition as an ad hoc membership organization.

[00:57:23] Speaker 04:
They have members throughout and I think

[00:57:26] Speaker 04:
It may be not be the most precise term, but an literal reading of throughout means we've got them everywhere.

[00:57:32] Speaker 04:
That's what throughout means.

[00:57:34] Speaker 04:
We've got them everywhere.

[00:57:37] Speaker 04:
We don't dispute that.

[00:57:39] Speaker 07:
I don't dispute that they said throughout.

[00:57:42] Speaker 07:
When I read their complaint and looked at those pages 29 to 31, did not see them state that they have members in every single pricing zone.

[00:57:49] Speaker 07:
I didn't see them state, we have members in the pricing zones that have been allocated costs that we think were misallocated using the terror report.

[00:57:58] Speaker 07:
I didn't see them point to any of those statements.

[00:58:02] Speaker 07:
They didn't provide a declaration.

[00:58:05] Speaker 07:
or affidavit, this court in Delaware Department of Environmental Control, 785F, third one, which we cited in our brief, not for this point, but has said, you know, you'll even entertain or you have discretion to entertain a declaration with the reply brief.

[00:58:17] Speaker 07:
We raised an issue with their standing in our brief.

[00:58:20] Speaker 07:
You know, they didn't come forward with these additional facts that you were discussing with Mr. Engelman.

[00:58:24] Speaker 07:
And so I just didn't see, and I haven't seen in the record, you know, statements to the effect that they have

[00:58:30] Speaker 07:
parties everywhere or that one of their members is over or underpaying.

[00:58:35] Speaker 07:
Consumers being interested in competition, it seems like a general interest, but I'm happy to answer other questions on standing over time.

[00:58:44] Speaker 07:
Thank you.

[00:58:45] Speaker 02:
So why don't we hear from Council for interveners?

[00:58:54] Speaker 02:
Council for interveners.

[00:58:57] Speaker 06:
Yes, Your Honor.

[00:58:58] Speaker 06:
Can you hear me?

[00:58:59] Speaker 02:
Yes, I can.

[00:59:02] Speaker 06:
Thank you.

[00:59:02] Speaker 06:
Sorry, I had to switch over to my phone due to technical issues.

[00:59:06] Speaker 06:
May it please the court, my name is Christopher Sapino of the Mid-Continent Independent System Operator, MISO or Mid-Continent, speaking on behalf of the interveners for respondents.

[00:59:18] Speaker 06:
We're here today on petitioners' second attempt to compel MISO to use their preferred methodology, the line outage distribution factor, to allocate the cost of baseline reliability projects.

[00:59:31] Speaker 06:
They've completely failed to carry their burden of demonstrating that NISO's current methodology is unjust and unreasonable.

[00:59:39] Speaker 06:
Their argument is built entirely on a flawed LODF analysis performed by their expert witness that fails to distinguish between impacts and benefits and assumes its own conclusion, an argument that confuses the source of reliability obligation with the scope of the benefits provided from a BRP

[01:00:00] Speaker 06:
and a mistaken belief that BRPs only remain local if there are also approved MVPs that they will have the opportunity.

[01:00:08] Speaker 03:
You talk about the failure to distinguish impacts and benefits, but that's not a basis that the Commission relied on in rejecting

[01:00:17] Speaker 03:
their 206 challenge here, right?

[01:00:20] Speaker 03:
I mean, in fact, as Mr. Engelman pointed out, the commission itself has relied on the line outage method as a sort of valid inquiry in various contexts, even after it replaced the method here.

[01:00:38] Speaker 03:
So I guess those are two points.

[01:00:42] Speaker 03:
One, they didn't rely on it, and two, is it really

[01:00:47] Speaker 03:
flawed in the way that you say for failing to distinguish impacts and benefits.

[01:00:53] Speaker 06:
Thank you.

[01:00:53] Speaker 06:
Those are two questions.

[01:00:54] Speaker 06:
I'll try to answer each of those separately.

[01:00:57] Speaker 06:
First, the Commission did recite in their order our arguments and on paragraphs 86 through 88, while they did not state exactly which of the arguments they found persuasive, they indicated that the burden was not proven and that they have not moved the ball from where we were in 2013.

[01:01:17] Speaker 06:
So you can read into, do they have to adopt every one of our arguments in order to say that the petitioners haven't proven their burden when they haven't proven their burden?

[01:01:30] Speaker 04:
Well, how do we know which ones they've, I guess, sorry, just to follow up on that, I don't know how we know why the commission, we know why MISO didn't like the terror report.

[01:01:41] Speaker 04:
I don't know how we know why the commission.

[01:01:43] Speaker 04:
didn't.

[01:01:44] Speaker 04:
It says they're mixed.

[01:01:46] Speaker 04:
Well, that means some things mixed means there's some helpful things.

[01:01:49] Speaker 04:
There's some informative things.

[01:01:50] Speaker 04:
It doesn't mean it's all bad.

[01:01:52] Speaker 04:
It's mixed.

[01:01:53] Speaker 04:
So that's pretty vague.

[01:01:54] Speaker 04:
And then it says the sample of projects is highly selective.

[01:01:57] Speaker 04:
I don't even know what they mean by that.

[01:01:58] Speaker 04:
People, expert reports always support that person's side.

[01:02:01] Speaker 04:
So I don't know if they just mean we don't look at expert reports that support that person's side.

[01:02:05] Speaker 04:
That would be, FERC would be out of business.

[01:02:07] Speaker 04:
So I don't know what that means.

[01:02:09] Speaker 04:
And then all it says is you need to make some compelling arguments, but some

[01:02:13] Speaker 04:
One, the attack on the methodology is when the commission itself has never embraced.

[01:02:19] Speaker 04:
And I should think if it was going to embrace it, it would do it more specifically than this.

[01:02:24] Speaker 04:
And so I don't know how we know you have evidence that's put forward here.

[01:02:29] Speaker 04:
And if an agency says, well, it's next, which I interpret as it has some important, helpful information, and it has some not so good.

[01:02:40] Speaker 04:
And it's selective in that it supports their position.

[01:02:43] Speaker 04:
Is that really grappling with the evidence that's been put before?

[01:02:49] Speaker 06:
Yes, Your Honor, I believe that it is.

[01:02:51] Speaker 06:
If you look at paragraph 86 of the order on page 530 of the joint appendix, say that complainants have not demonstrated that the current BRP cost allocation methodology is unreasonable because the record isn't sufficient for us to conclude that the pricing dome does not receive the majority of the benefits.

[01:03:10] Speaker 06:
It certainly is for a number of examples.

[01:03:13] Speaker 04:
It certainly is for a number of examples in the report.

[01:03:15] Speaker 04:
Now we can argue about whether four is enough, five is enough, 12 is enough, but there certainly were some that definitely, absolutely did that with 65%, 60%, 50%.

[01:03:26] Speaker 04:
So I don't know what to make of that.

[01:03:29] Speaker 06:
Your honor, our position is that assumes the correctness of the LODF methodology.

[01:03:35] Speaker 04:
The commission has found that the- And I think we have to assume that because FERC embraced it.

[01:03:39] Speaker 04:
FERC uses that in its position.

[01:03:41] Speaker 04:
It's used it repeatedly.

[01:03:43] Speaker 04:
And I know that MISO has its critiques of it, but it's hard.

[01:03:46] Speaker 04:
I don't know how we can read this opinion as FERC embracing that argument.

[01:03:50] Speaker 04:
Can we?

[01:03:52] Speaker 06:
Your honor, yes, you can.

[01:03:53] Speaker 06:
Because if FERC embraces the arguments that

[01:03:58] Speaker 06:
The primary beneficiary, the primary benefit of these projects is to resolve the local viability, the local reliability violation.

[01:04:06] Speaker 06:
LODF doesn't measure that.

[01:04:08] Speaker 06:
In fact, it completely ignores the ability of the, it completely ignores the requirement that the TL mitigate that constraint.

[01:04:18] Speaker 06:
I'm not aware of anywhere, you know, in this proceeding or in 2013 where FERC or the commission or even Alice Power has argued or the petitioners have argued

[01:04:28] Speaker 06:
that a flow change in and of itself is a benefit.

[01:04:35] Speaker 06:
Definitionally, it is not.

[01:04:37] Speaker 06:
It's a flow change.

[01:04:38] Speaker 04:
I understand your argument about that, but I don't know how I could say we as a court could say that's what the commission meant.

[01:04:49] Speaker 04:
Because they rely on the line definition.

[01:04:52] Speaker 04:
I'm not using the right terminology, but they rely on that exact same test in their opinion.

[01:04:56] Speaker 04:
They've relied on it pretty consistently.

[01:04:59] Speaker 04:
So I don't know how we can say that.

[01:05:00] Speaker 04:
That might be what they meant, but they surely haven't said it.

[01:05:05] Speaker 06:
Your honor, again, I understand that viewpoint.

[01:05:09] Speaker 06:
Our view is that they have said that the primary benefit is resolving the local reliability violation.

[01:05:16] Speaker 06:
So if you say that that is the primary benefit, and that's one benefit, then the idea that an LODF analysis must supply an alternative

[01:05:28] Speaker 06:
uh, is mistaken.

[01:05:30] Speaker 04:
Uh, so, but there's no other way to read their decision, but it's absolutely 100% certain that's what they meant.

[01:05:40] Speaker 06:
Your honor, I can't say there's no other way to read their decision.

[01:05:43] Speaker 06:
However, what I can say is that there is a reading of that.

[01:05:50] Speaker 06:
And the most sensible reading is that, uh, the RPs have not been shown to not be primarily to resolve

[01:05:58] Speaker 06:
local reliability violations.

[01:06:01] Speaker 06:
LODF method has been used by the commission as both a proxy for determining benefits.

[01:06:08] Speaker 06:
It's never been asserted to in and of itself be benefits.

[01:06:12] Speaker 06:
But we don't see how it disturbs that conclusion.

[01:06:15] Speaker 06:
It's a primary benefit or the transmission owner has to mitigate reliability constraints on a system.

[01:06:24] Speaker 06:
And the BRP is necessary to do that.

[01:06:29] Speaker 06:
What does the petitioner have to show in order to say that, you know, benefits are going outside of the zone?

[01:06:35] Speaker 06:
Bear in mind, Your Honor, that under the hierarchy that MISO has, any project that produces an actual regional economic benefit is going to be an MEP if it produces regional.

[01:06:51] Speaker 04:
Well, they say that their report says that hasn't happened.

[01:06:56] Speaker 04:
They identify a number of situations.

[01:06:59] Speaker 04:
Now, I'm not sure to say whether that's enough to throw out a categorical rule, but they say here's a number of situations where no one can with a straight face say it's modest spillover, 50, 60, 65%, things like that.

[01:07:13] Speaker 04:
They identify those.

[01:07:15] Speaker 04:
And they weren't treated as subject to, as market value or any other type of project that was subjected to competition.

[01:07:23] Speaker 04:
So saying that's just automatically going to happen, they've come forward with evidence

[01:07:29] Speaker 04:
that the commission has not indicted here.

[01:07:34] Speaker 04:
And we don't have to read it as indicting.

[01:07:36] Speaker 04:
I'd be troubled.

[01:07:37] Speaker 04:
I would feel uncomfortable.

[01:07:38] Speaker 04:
I can't speak for anyone else adopting a reading that rejects a theory, a model in theory that they have used repeatedly.

[01:07:45] Speaker 04:
And the other arguments museum makes just didn't touch those situations.

[01:07:49] Speaker 04:
So I don't think it's an answer to say that the rule works so that any time

[01:07:55] Speaker 04:
there's more than 50% of the benefits going to another zone that it'll be treated as a regional project.

[01:08:04] Speaker 06:
Your honor, I would ask where it all is the complaint or at any of the proceedings below, do they show that there's any actual benefit, that there's any $1 of savings or $1 of extra expense

[01:08:20] Speaker 06:
based on any flow impact to any of these changes.

[01:08:25] Speaker 04:
We use the model that FERC used.

[01:08:30] Speaker 04:
Can you tell me how many projects within MISO have been subject to competitive bidding since Order 1000 was issued?

[01:08:43] Speaker 06:
Do you have that statistic somewhere?

[01:08:48] Speaker 06:
Uh, yes, I believe we've had two projects that have been subject to competitive bidding.

[01:08:53] Speaker 06:
However, there would have been more projects, uh, except for that state.

[01:08:58] Speaker 04:
Right.

[01:08:58] Speaker 04:
So I'm sorry.

[01:08:59] Speaker 02:
And that's over, over a decade now, broader than, let me just say, it's not just too discreet projects.

[01:09:11] Speaker 02:
Let me just be clear.

[01:09:13] Speaker 02:
How are you going to finish your answer to judge Malik?

[01:09:18] Speaker 06:
Okay.

[01:09:18] Speaker 02:
You said there were two projects, but there could have been more.

[01:09:23] Speaker 06:
There could have been more, however, several states in the MISO footprints have right of first refusal laws that would make a project that might otherwise be not competitive.

[01:09:36] Speaker 06:
So we had some that could have qualified for that, one in Minnesota.

[01:09:42] Speaker 06:
but was not eligible as a result of that.

[01:09:44] Speaker 04:
Well, that was known at the time all these exceptions were adopted, so two in a decade?

[01:09:51] Speaker 06:
Your honor, I would submit that, well, two points.

[01:09:55] Speaker 06:
I would submit that there's no quota.

[01:09:58] Speaker 06:
If a BRP truly is a local project, there was no guarantee.

[01:10:04] Speaker 04:
Did you mean two BRPs or did you mean two projects at all?

[01:10:08] Speaker 04:
of any category.

[01:10:09] Speaker 04:
Sorry, I want to make sure I understood your answer correctly.

[01:10:12] Speaker 04:
Maybe I misunderstood it.

[01:10:13] Speaker 04:
When I asked how many projects, were you telling me just baseline reliable projects or projects of any type?

[01:10:22] Speaker 06:
Was your question, Your Honor, whether the projects were competitive or how many projects?

[01:10:27] Speaker 04:
When I say project, I'm not talking just about baseline reliability.

[01:10:29] Speaker 04:
I'm talking about any projects.

[01:10:33] Speaker 04:
But there weren't multi-value projects.

[01:10:34] Speaker 04:
There were another thing.

[01:10:35] Speaker 04:
So maybe there was some other category you know of.

[01:10:39] Speaker 06:
Well, there's there's been two market efficiency projects or three market efficiency projects in that intervening time frame, two of which have actually been put out to competition and one of which was actually won by one of the one of the complainants affiliates.

[01:10:55] Speaker 04:
OK, so that's that's separate from these two.

[01:10:58] Speaker 04:
The two you were talking about were two baseline about reliability projects.

[01:11:03] Speaker 06:
Market efficiency projects, Your Honor.

[01:11:06] Speaker 04:
OK, so.

[01:11:09] Speaker 04:
Sorry.

[01:11:10] Speaker 06:
Go ahead.

[01:11:13] Speaker 04:
I have a much more simplistic understanding things than you do in this area, so I apologize.

[01:11:18] Speaker 04:
So my question had been how many projects, and I meant projects a bit large, have been subject to competition?

[01:11:23] Speaker 04:
And the answer we got was two.

[01:11:26] Speaker 04:
But then in light of Judge Rogers' question, I wanted to understand, did you mean only two baseline reliability projects have qualified for competition?

[01:11:37] Speaker 06:
Sorry, Your Honor, there have been two projects that have been found eligible for competition in MISO.

[01:11:43] Speaker 06:
Total.

[01:11:44] Speaker 04:
Okay, total.

[01:11:45] Speaker 04:
But then you just said that there were three market efficiency projects.

[01:11:49] Speaker 04:
Did one of those fall victim to this?

[01:11:52] Speaker 04:
Is that one of those that fell victim to the state right of first refusal?

[01:11:55] Speaker 06:
Yes.

[01:11:56] Speaker 04:
Got it.

[01:11:57] Speaker 04:
Okay.

[01:11:57] Speaker 04:
Yes, Your Honor.

[01:11:59] Speaker 04:
All right.

[01:12:00] Speaker 02:
Anything further, Council?

[01:12:03] Speaker 04:
Do you know how many market efficiency and multi-value projects have been approved for the 2020 and 2021 MISO planning cycles?

[01:12:13] Speaker 06:
Your honor, that's actually one point that I did want to bring to the court's attention.

[01:12:19] Speaker 06:
MVPs move cyclically.

[01:12:21] Speaker 06:
We invested about $6.5 billion in 2011 and 2012.

[01:12:27] Speaker 06:
All the BRPs combined in that time are only about $5.3 billion.

[01:12:33] Speaker 06:
I so just filed last week with the commission a proposal that is going to, that is intended to help produce the next tranche of projects that we hope will be MVPs.

[01:12:48] Speaker 06:
And that's the LRTP initiative.

[01:12:50] Speaker 06:
And that filing was, if I can look for a second and see where that filing was made in docket ER22-995.

[01:13:00] Speaker 06:
But the point that I will any of those.

[01:13:03] Speaker 04:
And I don't mean to mix up category cases here, but will any of those that are proposed qualifies immediate need reliability projects?

[01:13:11] Speaker 06:
It's it's too it's too soon to say, your honor.

[01:13:15] Speaker 06:
However, there is these are still proceeding through the stakeholder process.

[01:13:19] Speaker 06:
But the point that I wanted to illustrate with that is that is that these projects move in cycles, we don't

[01:13:28] Speaker 06:
MISO does not build six billion in projects and then three years later build another few billion.

[01:13:33] Speaker 06:
These are large portfolios.

[01:13:36] Speaker 06:
So yes, there's plenty of testimony in the underlying record about why these cycles may have been pushed out a bit longer due to lower gas prices and other industry developments.

[01:13:50] Speaker 06:
But we still do expect that there will be more MVPs.

[01:13:54] Speaker 06:
Regardless,

[01:13:55] Speaker 06:
there's not a quota, it's not appropriate simply because they want more projects to compete on, to take something that isn't redo.

[01:14:05] Speaker 04:
Do you know how many projects total have been approved since order 1000 within MISO?

[01:14:13] Speaker 04:
So we got two subject to competition, what's the denominator there?

[01:14:18] Speaker 06:
Out of... But I believe that it is somewhere in the neighborhood of

[01:14:23] Speaker 06:
I believe it is in somewhere in the neighborhood of 500.

[01:14:25] Speaker 04:
Two out of 500.

[01:14:29] Speaker 04:
Ballparking it.

[01:14:33] Speaker 04:
Okay.

[01:14:33] Speaker 04:
Thank you.

[01:14:35] Speaker 02:
Thank you, council.

[01:14:37] Speaker 02:
All right, council for petitioners.

[01:14:40] Speaker 05:
Thank you, Your Honor, and Judge Millett, if you look at JF-39 and 50... Your line's crackling up a little bit here.

[01:14:50] Speaker 04:
Did you say 49 and 50?

[01:14:52] Speaker 05:
49 and 50 is a list of projects in MISO that have occurred since 2010.

[01:15:00] Speaker 05:
So, we'll answer all of your questions about the number of projects.

[01:15:05] Speaker 05:
Mr subpoena was right, only two have been competed.

[01:15:08] Speaker 05:
He is wrong about the number.

[01:15:11] Speaker 05:
For example, there were 310 other projects in 2019 alone at $2.8 billion.

[01:15:18] Speaker 05:
2019 was the year that we wanted to challenge the going forward application of baseline reliability, not having regional benefits.

[01:15:29] Speaker 05:
There were 113 projects that year at $836 million.

[01:15:33] Speaker 05:
So there's quite the list here and you are corrected to have been competed.

[01:15:38] Speaker 05:
I want to touch on something Mr. Sapino said because he made a very strong argument that nobody has ever equated impacts with benefits.

[01:15:48] Speaker 05:
If you will look at our on at JA404, we quote the commission in its 2013 order saying the following quote, MISO explains that LODF analysis identifies the beneficiaries of a baseline reliability project based on the impact.

[01:16:09] Speaker 05:
That's exactly what we put forth.

[01:16:12] Speaker 05:
And your honor, Judge Millett, I think what you've identified is the problem with this case.

[01:16:17] Speaker 05:
FERC hasn't addressed the actual substance of what we put forth.

[01:16:20] Speaker 05:
They simply made a conclusory analysis that we didn't meet the requirements to

[01:16:27] Speaker 05:
We didn't meet our burden of proof.

[01:16:30] Speaker 05:
And, and Mr. Glover would have you believe that their analysis back in 2013 was that there were going to be these kinds of projects with 50 60 or 70%, because he says we didn't meet the burden of showing change circumstances.

[01:16:44] Speaker 05:
That can't be what the commission meant then there's nothing in the record to suggest that the commission meant in 2013 when they allowed this order or allowed the elimination of regional allocation that there were going to be 40 5060% of the benefits, and what we've asked is that the court.

[01:17:03] Speaker 05:
send it back to the commission to actually answer all of these questions.

[01:17:07] Speaker 05:
And we think we've met the standing requirements through the various standing cases to have that outcome.

[01:17:14] Speaker 05:
That the court sends it back to the commission to answer these questions.

[01:17:17] Speaker 05:
Why is it appropriate to allow 50 or 60 or 70% of the benefits to go to a zone that's not getting any of the costs?

[01:17:27] Speaker 02:
And on the- Anything further council?

[01:17:29] Speaker 04:
Can I ask you what your denominator is to out of

[01:17:33] Speaker 05:
I can, I could give you the answer, but unfortunately we didn't add it up on 40, 49 and 50, but I believe the denominator when you include other projects, which are a separate category.

[01:17:46] Speaker 04:
I said all projects.

[01:17:49] Speaker 05:
I believe the denominator will be in a couple thousand.

[01:17:55] Speaker 03:
Your best standing case is Sierra Club or what's your best case that you have shown enough

[01:18:02] Speaker 05:
It's Sierra Club that we've established sufficient harm for the associations to show that their members are harmed both by improper cost allocation, some benefited, some harmed by improper cost allocation, and by the lack of competition.

[01:18:24] Speaker 02:
Even though you never identified them.

[01:18:27] Speaker 02:
or where they are, anything like that.

[01:18:29] Speaker 02:
I mean, counsel, that's not what Sierra Club is getting at.

[01:18:33] Speaker 02:
All right?

[01:18:34] Speaker 02:
If you had identified, then it might be self-evident, but it's not self-evident.

[01:18:40] Speaker 05:
That's the problem.

[01:18:42] Speaker 02:
And where it isn't self-evident, Sierra Club said, file an affidavit with your opening brief.

[01:18:49] Speaker 02:
And this court has gone along to say, well, if it isn't

[01:18:52] Speaker 02:
Crystal clear, we'll let you do it in a reply brief as well.

[01:18:56] Speaker 02:
But in any event, so Sierra Club is what you're relying on, right?

[01:19:02] Speaker 05:
It is.

[01:19:03] Speaker 05:
And then on the competition piece, I just want to add on JA48 or 46 footnotes 67 and 68.

[01:19:11] Speaker 05:
Those show the amount that the cost is increased on those projects because they weren't subject to competition.

[01:19:20] Speaker 05:
There's no cost caps or any other thing on those projects.

[01:19:22] Speaker 02:
Does anybody have?

[01:19:25] Speaker 02:
It's imminent harm.

[01:19:26] Speaker 05:
Rape payers are harmed, which Mr. Glover said acknowledged was an actual harm.

[01:19:31] Speaker 02:
All right.

[01:19:32] Speaker 02:
And all of our clients are rape payers.

[01:19:33] Speaker 02:
We're going round and round on the same points, aren't we, counsel?

[01:19:35] Speaker 02:
We're trying to get you to get us within the Supreme Court.

[01:19:39] Speaker 02:
And maybe my colleagues will say you've done enough.

[01:19:42] Speaker 02:
All right?

[01:19:42] Speaker 02:
But I think we have your argument.

[01:19:44] Speaker 02:
Anything new?

[01:19:45] Speaker 05:
No.

[01:19:46] Speaker 05:
Thank you, Your Honor, for hearing us.

[01:19:48] Speaker 02:
Thank you.

[01:19:48] Speaker 02:
Thank you, counsel.

[01:19:49] Speaker 02:
We'll take the case under advisement.