[00:00:00] Speaker 00:
Case number 20-1422, LSB transmission holdings to ALC petitioner versus Federal Energy Regulatory Commission.

[00:00:09] Speaker 00:
Mr. Engelman for the petitioner, Ms.

[00:00:11] Speaker 00:
Martin Stone for the intervener, Ms.

[00:00:13] Speaker 00:
Benta for the respondent.

[00:00:18] Speaker 05:
All right, council for petitioner.

[00:00:23] Speaker 07:
Good morning, Michael Engelmann on behalf of the petitioner.

[00:00:26] Speaker 07:
I'd like to reserve three minutes for rebuttal.

[00:00:29] Speaker 07:
I want to start my review with the first four paragraphs of the order initiating the Section 206 process that FERC began in 2019.

[00:00:40] Speaker 07:
I want to start there because those paragraphs demonstrate that the entire purpose of that Section 206 process was to determine whether the balance first struck in 2014 between the rights of LS Power, a qualified transmission developer in ISO New England and similarly situated developers to compete for reliability-based transmission additions in ISO New England.

[00:01:05] Speaker 07:
whether that balance between those rights to compete and the potential for reliability concerns arising from that competition, whether that balance was being maintained.

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FERC made clear in those paragraphs that what it allowed in 2014 as a just and reasonable tariff provision was an exception to be applied only on a limited basis.

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And it was that limited nature that was necessary for the balance to be maintained between competition and reliability.

[00:01:38] Speaker 05:
Well, why shouldn't this court read what FERC did, accepting your point this is not an enforcement action, that

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The exceptions are for limited circumstances, but the commission went on to define what those circumstances are.

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So the fact that a number of projects meet all the factors in the exception, as the commission explained on its rehearing,

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is not a focus on numbers, your point about, what is it, 29 of 31 projects, but rather a focus on reliability and avoiding delay attendant to competition.

[00:02:47] Speaker 07:
Your honor, the response is that FERC is misrepresenting what those criteria were for.

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The criteria were never to establish that in those circumstances that is limited.

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The criteria were to ensure that it would only be used in limited circumstances.

[00:03:04] Speaker 05:
Well, my point is, though, I get your take of how you want to read it, but the commission says this is a limited exception.

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And it only applies if you meet these five

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requirements.

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And so we even held a hearing and we look back at contracts in three different jurisdictions.

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And one we dismissed because we found no problem.

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Another one, we ordered corrections to be made because they were not consistent with the criteria.

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And then we have

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your case where the commission said we looked at what the doing is doing and it is following criteria that we set forth.

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In other words, I'm trying to distinguish between numbers can't be the end game as the commission has defined this.

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unless the commission wants to say, well, this exception will only apply to 10% of the contracts and no more.

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But it didn't say that.

[00:04:26] Speaker 07:
It didn't say that in numbers, but it said that in words, Your Honor.

[00:04:31] Speaker 07:
And we have to back up a little bit because again, the five criteria were never in and of themselves a judge to be just and reasonable.

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The only thing the five criteria were a judge to be were to ensure that the exception was used in limited circumstances.

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And it's the limited exception that is just and reasonable.

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See that's what I don't understand.

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I understand your words, but the commission says if we're satisfied that you're meeting these criteria, then we're satisfied.

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And the problem in this case is that's not what it said in 2014 and it's not what it said in 2019 when it initiated the section 206 order.

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Because what it said in both of those times was this exception is only just and reasonable if it's used on a limited basis.

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And the reason it said that is because it was balancing the rights between entities like LS Power to compete

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and the supposed reliability concern.

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And the reason it was balancing that right is because in 2014, when it allowed the exception, just the year before, it had stood in front of this court and defended removing all preferences related to reliability projects across the country for incumbent transmission owners.

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And it defended that by saying in paragraph 428 of order 1000A, that it didn't matter that it was a reliability project that doesn't change the commission's obligation to allow competition, because without competition, rates are unjust and unreasonable.

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So 2014- Let's assume that everything you have represented is correct.

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Now the commission on rehearing examines these objections

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and offers an explanation of why it thinks its exception should be understood as it said.

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Why is that impermissible?

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Because the commission under the Administrative Procedure Act is required to actually conform with its precedent or disclaim that precedent.

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either it explains it further or decides it's going to change it.

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And all I'm getting at is why can the court ignore the commission statement that when we said limited circumstances, we weren't talking about numbers in an absolute term.

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but in a different way as we explain in our order on rehearing.

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That's all I need to understand here.

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And the reason is that FERC actually didn't offer an explanation.

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No explanation on rehearing?

[00:07:50] Speaker 07:
No explanation on rehearing.

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It simply said that notwithstanding that 30 of 31 projects were excluded from competition, we continue to believe that the criteria that you referenced earlier continue to balance the rights of competition and reliability.

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But it never explained how they balance those rights when the very criteria that FERC put in place to ensure that the exception is only used in limited circumstances don't limit it.

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And FERC talks about, well, we weren't talking about numbers.

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There's no other way to look at limited use.

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And FERC said in the- No, there is.

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I mean, we know this from statutes and exceptions all the time, that by limited use,

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What it said, if you meet these five criteria, you get to come into the exception.

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If you don't, you don't.

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But numbers is not the focus.

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That's all I'm getting at.

[00:08:55] Speaker 07:
What the proof in the record, excuse me, let me make two points.

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I'll back up first to 2014 and 2015.

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FERC specifically put numbers at issue by saying in 2014, an exception that effectively excludes competition is unjust and unreasonable.

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FERC said that in 2014.

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They then put in place all of the criteria to ensure that the exception would be used in limited circumstances.

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So FERC right there has said that if you completely exclude competition, that's unjust and unreasonable.

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if you limit competition, or if you use this exception on a limited basis, that can be just and reasonable.

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And FERC repeated that in the show cause order in paragraph four, where it says it was undertaking a balancing of interest between competition and reliability concerns, and that the balancing led FERC to find, quote,

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An exception for immediate need reliability projects could be just and reasonable when the application of that exception is limited by the above noted criteria.

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So FERC, even in the show cause order in this section 206 initiating order, is confirming that it's the actual use of the exception on a limited basis that's the controlling factor.

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And FERC didn't disclaim any of that in its orders on review.

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It simply made- Your own quote you just gave me is, when limited by the above criteria.

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So it examined three regional transmission operators actions.

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And it explained why one, it had no problem.

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Two, it did have a problem and it directed changes.

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and three, why it wasn't concerned here.

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And I guess I understand your point about the numbers speak for themselves and maybe that's the end of it, but at least FERC didn't think so.

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And I need to know how the court makes a decision that what it was irrational for the commission to define the exception

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as it did?

[00:11:23] Speaker 07:
Well, Your Honor focused on the last of that sentence, which is as by the above noted criteria, but it's the application on your sentence.

[00:11:35] Speaker 07:
Yes, I and the sentence came from the sentence came from FERC and it's the application of the exception that has to be limited.

[00:11:44] Speaker 01:
Sorry, go ahead, Judge.

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I was just going to probe further on this very point.

[00:11:51] Speaker 01:
So just stepping back, sort of big picture, one of the things that's challenging about this case is it's not, you know, arguing that what FERC has done is contrary to statute.

[00:12:02] Speaker 01:
It's sort of one FERC order versus another FERC order.

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It's FERC

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In order 1000 and then for in closing its its investigation here.

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And what you're saying is well those aren't really two equal things you know one looking at let's encourage.

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competition by getting rid of presumptive rights of first refusal and the other saying, yes, but let's allow an exception to that where reliability concerns are at stake.

[00:12:31] Speaker 01:
You're saying, well, there's actually a hierarchy here in terms of authoritativeness, order 1000, because it was hell, it was a ruling about what's just and reasonable is the baseline.

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And therefore, the

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sort of dictate about limitation controls over the five criteria that are identified, which, in your view, have never been deemed to be just and reasonable.

[00:13:00] Speaker 01:
Is that sort of what you're getting at here?

[00:13:04] Speaker 07:
It is, Your Honor, and that's exactly the point.

[00:13:08] Speaker 07:
It's a point that FERC acknowledged throughout.

[00:13:11] Speaker 07:
So it starts its analysis back in 2014 with Order 1000, and in paragraphs 238 and 239 of the 2014 order, that's 143 FERC,

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61-150, FERC specifically lays out that Order 1000 provided rights to entities like LS Power to compete, and for reliability projects as well.

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And this court upheld that right in, excuse me,

[00:13:44] Speaker 07:
Yes, South Carolina Public Service Authority v FERC upheld that, including for reliability projects at pages 78 and 80.

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And so what FERC does in paragraph 239 is says that's one part of the balance.

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The other part of the balance is the potential for reliability concerns if competition delays a project.

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And then from that, what FERC says is, okay, we will allow an exception in limited circumstances and we're going to impose these criteria to ensure that it's used in limited circumstances.

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It never said these criteria in and of themselves are just and reasonable.

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What it said was these criteria are just and reasonable because they will limit the use.

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And what the record in this case shows is those criteria don't limit the use.

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And the record shows they never will in ISO New England for a lot of reasons that are in the record as to the way that ISO New England plans its project.

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So what we have now is in 2019 and 2020, FERC looking at the same history,

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and saying, yes, we said it's limited use.

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We repeat that in paragraph three of the show cause order.

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It's a limited use exception.

[00:15:09] Speaker 07:
But even though the criteria we put forth didn't limit its use, the balance is still fine.

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And what we're saying is that's inconsistent with all of their prior orders.

[00:15:22] Speaker 05:
Let me just read from the order on reconsideration.

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And it says, this is in paragraph 23, we continue to find that the five criteria appropriately balance reliability and competition and that the tariff is being implemented correctly, semicolon.

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The frequency with which the immediate need reliability projects qualify under the exemption does not alone provide sufficient evidence that the tariff is unjust and unreasonable.

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So contrary to your arguments, the commission made that express finding in paragraph 23 on rehearing.

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And then it talked about its

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precedent and it talks about these exemption five criteria to place reasonable bounds on the ISO NE discretion to ensure the exception would be used only in limited circumstances.

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Nothing in the record of this proceeding has persuaded us that the exemption is no longer appropriate.

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For example, the evidence in the record contradicts LS Power's assertion that the commission, et cetera.

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So my point is, I thought it addressed directly your arguments and said, we're not persuaded because we continue to think, we continue to think.

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And one of the questions I have is, your challenge is across the board.

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It's not as though you were bidding on something or even said you wanted to bid on something or your client wanted to bid on something and you were unable.

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And it turns out that this is just a total misapplication of these criteria.

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In other words, what FERC explained on rehearing, I mean, you may not be persuaded, and I understand that, and maybe the court won't be.

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But at least FERC directly addressed your arguments and said, we disagree.

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And it explained why it disagreed.

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And so the fact that it said things as you interpret them

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In order 1000 and then in the order should cause it seems to me.

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What the Commission says is we don't find anything inconsistent here.

[00:18:06] Speaker 07:
And that's precisely the problem, your honor.

[00:18:09] Speaker 05:
All right, and your evidence is numbers.

[00:18:12] Speaker 05:
You have not pointed to the fact that the New England ISO is not properly applying the criteria.

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The commission found it was.

[00:18:26] Speaker 07:
And again, that's exactly the point.

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If the criteria are intended to limit the use and ISO New England is appropriately applying the criteria.

[00:18:37] Speaker 05:
Limit the use council is numbers.

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first limit the use is different.

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And I'm trying to understand why that's either arbitrary and capricious or, you know, in excess of it, sorry.

[00:18:51] Speaker 07:
Because, Your Honor, I'm sorry to interrupt you.

[00:18:55] Speaker 05:
I interrupted you.

[00:18:57] Speaker 07:
It's because FERC never identifies what limited use is if it's not numbers.

[00:19:02] Speaker 07:
Because what FERC said in 2015 is if you effectively exclude competition, then that's unjust and unreasonable.

[00:19:08] Speaker 07:
They said that.

[00:19:09] Speaker 07:
That's unjust and unreasonable.

[00:19:11] Speaker 07:
We have effectively excluded competition in ISO New England by using these exceptions.

[00:19:17] Speaker 07:
While FERC says what it says in paragraph 22, it doesn't actually back up that blanket statement that we continue to believe that it balances the interest.

[00:19:28] Speaker 05:
That's the point.

[00:19:29] Speaker 05:
The commission has said, we held a hearing.

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We looked at what the New England ISO was doing.

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We are satisfied.

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It is appropriately applying the criteria because now we understand how it does its analysis.

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and why its projection operation date is either going to be too early or too late.

[00:19:54] Speaker 05:
And it says, now that we understand that, we are satisfied.

[00:19:59] Speaker 07:
And again, FERC says that we are satisfied now that we understand that, but that goes against everything it said in 2014 and 2015 when it was balancing competition and reliability.

[00:20:13] Speaker 05:
And what we pointed out- My point is that if Congress passes a statute that says anybody who's over 21 and I don't know, went to Harvard Law School in the 60s,

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can bring this lawsuit.

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And we anticipate this is going to be a limited opportunity.

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In fact, everybody in the 60s files.

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Numbers is irrelevant, says FERC.

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What we're looking at is this balance.

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And we have examined the records

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in the New England ISO to look specifically at what you're complaining about.

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And we don't find the error that you speculate exists.

[00:21:05] Speaker 07:
And whether you look at numbers or some other factor, what FERC has failed to identify is the balancing it did.

[00:21:14] Speaker 07:
There's nothing in the order that shows that it balanced competition because there's only been one project for competition.

[00:21:23] Speaker 07:
So there's no balance on that side.

[00:21:24] Speaker 07:
On the other side of the balance, which is the supposed reliability concern, it also didn't identify the fact that none of these projects that were supposedly immediately needed

[00:21:35] Speaker 07:
made it in service by their need-back date.

[00:21:38] Speaker 05:
So the presumption that- It directly responds to that in paragraph 30.

[00:21:45] Speaker 07:
It responds without giving an answer that actually addresses the issue.

[00:21:51] Speaker 05:
It gives an answer, Council.

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What it doesn't do is, as I understand it, and neither do you.

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You're not attacking any particular project and saying, well, in fact,

[00:22:04] Speaker 05:
You know, the New England ISO did not apply this criteria properly.

[00:22:12] Speaker 05:
All right.

[00:22:13] Speaker 01:
Let me let me just circle back on the same train so.

[00:22:21] Speaker 01:
What's your response to the notion that FERC limited this exception in Order 1000?

[00:22:29] Speaker 01:
It limited it not quantitatively, but to bona fide reliability concerns, and maybe it misforecast how often those reliability concerns would be present.

[00:22:42] Speaker 01:
And I take you to be saying, yeah, but

[00:22:46] Speaker 01:
look at how the service dates are shifting and it's allowing this exception to be applied where there aren't really bona fide liability concerns.

[00:22:57] Speaker 01:
And to that I would say that is really in the heartland of FERC's

[00:23:02] Speaker 01:
agency expertise and, you know, given that it's identified criteria, given that it's blessed the application of these criteria and saying that the frequency alone is not evidence that it's unjust and unreasonable.

[00:23:17] Speaker 01:
It just seems hard for us to leap into the fray and second guess that.

[00:23:23] Speaker 07:
And we're not actually asking you to second guess that.

[00:23:26] Speaker 07:
But I wanna go back because you started that that Order 1000 said there may be these extreme liability issues.

[00:23:34] Speaker 07:
Order 1000 didn't actually say that.

[00:23:36] Speaker 07:
Order 1000 said, compete all projects with a few exceptions that aren't relevant here.

[00:23:41] Speaker 07:
Compete all projects, including reliability projects.

[00:23:45] Speaker 07:
It was only on the compliance filing with Order 1000 that ISO New England came in and said,

[00:23:51] Speaker 07:
Yeah, order 1000 said compete all projects, but we're really concerned about these reliability issues.

[00:23:58] Speaker 07:
And FERC balanced that and said, yes, but order 1000 required competition.

[00:24:04] Speaker 07:
So we have to respect that.

[00:24:06] Speaker 07:
And the way to respect that is to ensure that any exception for reliability is only done on a limited basis.

[00:24:15] Speaker 07:
And what we're asking you to do is to not jump into the fray of reliability or not reliability.

[00:24:22] Speaker 07:
The record is very clear.

[00:24:24] Speaker 07:
There has not been a single instance of a reliability concern, notwithstanding that multiple projects didn't go online by their need date.

[00:24:34] Speaker 05:
Respectfully, counsel, that's begging Judge Pillard's question, it seems to me.

[00:24:39] Speaker 05:
Because the very thing you want us to tell FERC is actually

[00:24:45] Speaker 05:
The way to do this is to limit the numbers.

[00:24:51] Speaker 05:
That's not our focus.

[00:24:54] Speaker 07:
That's not exactly what we want you to do.

[00:24:57] Speaker 07:
We want you to send it.

[00:24:59] Speaker 05:
You just said, I'm quoting you, quote, the way to assure this is to limit the number of projects where competition is eliminated.

[00:25:09] Speaker 07:
But what we want is for you to send it back to FERC to say in 2014 and 2015 you said that this would only be just and reasonable if it were limited in use.

[00:25:21] Speaker 07:
It has not been limited in use and you haven't fully explained that.

[00:25:26] Speaker 07:
and to send it back for FERC to actually explain.

[00:25:30] Speaker 07:
And if it comes to a different conclusion today, then we may be back related to that, or we may be not.

[00:25:36] Speaker 07:
But FERC may go back to what it said in 2014, which is we have to balance competition and these reliability concerns.

[00:25:44] Speaker 07:
It hasn't done that in these orders.

[00:25:46] Speaker 01:
I have just one question about standing.

[00:25:49] Speaker 01:
And I know it's an unpublished judgment, but in 2017, we held no standing because you hadn't specifically identified a project that incumbents actually accepted and that therefore you were deprived of the opportunity on which to compete.

[00:26:09] Speaker 01:
And that hasn't been made spelled out here.

[00:26:13] Speaker 01:
Why is that an outstanding defect?

[00:26:15] Speaker 07:
Here, it's because in that case, LSP transmission VFIRC, we had the opportunity to put in a proposal or the opportunity that a project would come up and the exception hadn't been used.

[00:26:35] Speaker 07:
In this case, the exception's been used 30 out of 31 times and the record- The incumbents have accepted in each one of these cases?

[00:26:44] Speaker 07:
They didn't have to accept.

[00:26:46] Speaker 07:
They were given the project and told to build it.

[00:26:48] Speaker 07:
There is no opportunity to bid.

[00:26:50] Speaker 07:
We can't say we want to do this project.

[00:26:52] Speaker 01:
They have a right of first refusal and they accepted the right of first refusal is what I'm saying.

[00:26:56] Speaker 07:
Absolutely, they accepted the right of first refusal, and the record is that the exception will continue to be used in the same way going forward.

[00:27:04] Speaker 07:
ISO New England at JA56 specifically says that it is implemented as intended, meaning it's going to continue to exclude projects in the future.

[00:27:15] Speaker 07:
So in this instance, we meet what was said in LSB transmission, which is we have been excluded from projects.

[00:27:23] Speaker 07:
And in addition on the standing issue, it's actually FERC's order terminating the show cause in the rehearing order.

[00:27:31] Speaker 07:
This specifically harm us because in our view, and Judge Rogers may have a different view based on comments, but in our view in the- No, I've just asked questions, counsel.

[00:27:43] Speaker 07:
I understood, sorry.

[00:27:46] Speaker 07:
In our view, in those orders FERC actually changed the balance and it changed the balance to harm LS power because the old balance is we have the opportunity to compete, but the reality is there's not that opportunity to compete because of the way the exception's been implemented.

[00:28:03] Speaker 02:
Before you conclude, I have a couple of questions.

[00:28:07] Speaker 02:
The first is the three-year rule that we're discussing here.

[00:28:11] Speaker 02:
Is that unique to ISO New England or does it apply to other regional ISOs?

[00:28:17] Speaker 07:
So it applies to the PJM RTO, but differently, and it applies to SPP, the Southwest Power Pool RTO.

[00:28:28] Speaker 07:
All of those were implemented on compliance with Order 1000.

[00:28:32] Speaker 02:
Okay, well, that leads to my next question.

[00:28:35] Speaker 02:
The 206 proceeding here, whether you call it an investigation, an inquiry, or just a proceeding, the topic at least concerns ISO New England

[00:28:48] Speaker 02:
was compliance with the three-year five criteria rule.

[00:28:54] Speaker 02:
And FERC found that there was compliance.

[00:28:59] Speaker 02:
Your position, as I understand it, is not to challenge that, but to say, well, you should have reconsidered the rule itself.

[00:29:07] Speaker 02:
But wasn't that beyond the scope of the 206 proceeding here?

[00:29:13] Speaker 07:
I know your honor in paragraph one of the show cause order first specifically said that it was reviewing the justness and reasonable reasonableness of the competition exception, it had allowed.

[00:29:25] Speaker 02:
And it was as as implemented.

[00:29:28] Speaker 02:
Well, it's isn't that right.

[00:29:31] Speaker 02:
The whole thing was called compliance hearing, which deals with not with

[00:29:36] Speaker 02:
You know, we have a doctrine, which I'm sure you're familiar with, not a doctrine, but a method of talking about a challenge to something on its face and a challenge on a rule or a regulation or a statute as applied.

[00:29:51] Speaker 02:
And it seems to me that the gist or the thrust at least of this proceeding is an as applied challenge.

[00:29:58] Speaker 02:
And I, you know, I've read some of your pleadings and I guess you tried to tee up the question of

[00:30:06] Speaker 02:
the legitimacy of the three, three year five criteria rule on its face.

[00:30:13] Speaker 02:
But it seems to me that FERC gave that the back of the hand because they weren't interested in it, particularly at this stage.

[00:30:20] Speaker 02:
And I know this is a long question.

[00:30:23] Speaker 02:
I'm sorry for that.

[00:30:25] Speaker 02:
But the other point would be that if you had a problem with the rule on its face, you certainly were entitled to bring a 206 action, were you not?

[00:30:37] Speaker 07:
We were, and I think that that's the point.

[00:30:41] Speaker 07:
In a 206 action under section 206, FERC is obligated to address, it shall determine a just and reasonable rate if it determines that a rate is unjust and unreasonable.

[00:30:53] Speaker 07:
Once it started to 206, it's our view that it was looking at all aspects of this rule.

[00:30:59] Speaker 07:
And whether you look at it as applied or not, FERC said it would be just and reasonable if it were applied in a limited circumstances.

[00:31:07] Speaker 07:
Now FERC's saying, well, they applied it as we said, but that's not accurate because it wasn't applied on a limited basis.

[00:31:16] Speaker 02:
OK, yeah.

[00:31:17] Speaker 02:
You're going over ground.

[00:31:18] Speaker 02:
You've already plowed.

[00:31:19] Speaker 02:
I get it.

[00:31:20] Speaker 02:
I get it.

[00:31:21] Speaker 02:
OK, thank you.

[00:31:23] Speaker 05:
All right.

[00:31:24] Speaker 05:
Why don't we hear from FERC?

[00:31:26] Speaker 07:
Your Honor, there was a, sorry.

[00:31:30] Speaker 07:
You want an intervener?

[00:31:31] Speaker 05:
Yeah.

[00:31:31] Speaker 05:
All right.

[00:31:32] Speaker 05:
Let's hear from an intervener.

[00:31:34] Speaker 03:
Good morning and may it please the court.

[00:31:36] Speaker 03:
Amber Martin-Stone on behalf of Intervenor Massachusetts Municipal Wholesale Electric Company.

[00:31:42] Speaker 03:
MyKind is an organization of consumer-owned utilities that want to reap the benefits of competition.

[00:31:48] Speaker 03:
Competition lowers costs and encourages innovation in transmission development.

[00:31:53] Speaker 05:
And what is wrong with what FERC did?

[00:31:57] Speaker 03:
So, Your Honor, FERC says competition is supposed to be the rule, but in New England, it's plainly the exception.

[00:32:02] Speaker 03:
And that is unjust and unreasonable and inconsistent with order 1000.

[00:32:06] Speaker 03:
You said before, Judge Rogers, that numbers can't be the end game.

[00:32:10] Speaker 03:
But the point here is that the numbers show exactly why this exemption is unjust and unreasonable.

[00:32:17] Speaker 03:
And let me explain why.

[00:32:18] Speaker 05:
Well, the commission on rehearing explained why that is a misunderstanding of the exception.

[00:32:27] Speaker 05:
that it was not mere numbers, all right?

[00:32:32] Speaker 05:
So you have to tell us why FERC's explanation on rehearing, it seems to me, was either beyond its authority or somehow other legally erroneous, given the core nature of the determination by FERC in light of its expertise and experience.

[00:32:56] Speaker 03:
So FERC says that the numbers are irrelevant, but that begs the question, what would be enough evidence to show that this exemption is not working?

[00:33:05] Speaker 03:
You've heard that 30 out of 31 projects were exempted from competition.

[00:33:11] Speaker 03:
And I want to look a little bit closer at the record here.

[00:33:13] Speaker 03:
So if you look at pages 58 through 61 of the Joint Appendix, that shows that 28 out of those 31 projects were allegedly needed in 2016 or sooner.

[00:33:26] Speaker 05:
And Kirk explains specifically having received a further detailed explanation from the New England ISO about how it assesses need and why those sort of operation dates are either going to be too soon or too late.

[00:33:51] Speaker 03:
You're right, Your Honor.

[00:33:52] Speaker 03:
FERC does explain that ISO has demonstrated why those need-by dates are too soon or too late.

[00:34:01] Speaker 03:
But the record also shows that reliability is not imperiled by that delay.

[00:34:08] Speaker 03:
So the system operator identifies needs on a conservative basis.

[00:34:12] Speaker 05:
Well, actually, FERC disagrees.

[00:34:16] Speaker 05:
All right, and explain why, because this exception is not focused on numbers.

[00:34:25] Speaker 03:
Your honor, FERC can say that the exception is not focused on numbers, but the data before it show that the exemption is not working, and that's because there's a- In your client's view, as opposed to the commission's view.

[00:34:40] Speaker 05:
That's what I'm trying to get over here, counsel.

[00:34:45] Speaker 05:
What is it other than the numbers that you say, here the exception swallows the rule?

[00:34:56] Speaker 05:
That's essentially your argument.

[00:34:58] Speaker 05:
That is right.

[00:34:59] Speaker 05:
There cannot be a situation such as there is in New England.

[00:35:04] Speaker 05:
And FERC says we beg to differ, or not we beg to differ, but we differ.

[00:35:09] Speaker 05:
And it explains why.

[00:35:11] Speaker 05:
And so what is the court supposed to do with that

[00:35:16] Speaker 05:
analysis.

[00:35:17] Speaker 05:
That's what I understand.

[00:35:18] Speaker 05:
I understand your client's position.

[00:35:20] Speaker 05:
I understand positions, the position of the petitioner.

[00:35:24] Speaker 05:
But exactly what do you see the court's role here?

[00:35:28] Speaker 05:
To say, well, we've read it.

[00:35:30] Speaker 05:
We disagree that the numbers, that's the end of the game.

[00:35:35] Speaker 03:
Judge Rogers, I would quibble a little bit with the premise of your question.

[00:35:39] Speaker 03:
You say that FERC has explained why this exemption remains just and reasonable.

[00:35:44] Speaker 03:
They, in several paragraphs, simply assert that they disagree with the argument.

[00:35:50] Speaker 03:
No, no, no, no.

[00:35:50] Speaker 05:
Counsel, with all due respect, read the reorder hearing.

[00:35:57] Speaker 05:
It doesn't simply assert.

[00:35:58] Speaker 05:
It says why.

[00:35:59] Speaker 05:
It explains in some detail.

[00:36:02] Speaker 05:
And you may disagree with that.

[00:36:05] Speaker 05:
But it's not as though FERC just said we disagree and moved on.

[00:36:12] Speaker 05:
Help the court here to understand your client's position.

[00:36:19] Speaker 05:
We can't ignore what FERC's orders say, but maybe they're defective in some way.

[00:36:27] Speaker 03:
That's right, Your Honor.

[00:36:27] Speaker 03:
So you can't ignore what FERC's orders say, but what FERC's orders say here do not connect with the evidence that was put before it.

[00:36:36] Speaker 05:
What evidence?

[00:36:38] Speaker 03:
The evidence of the 31 immediate need projects.

[00:36:42] Speaker 05:
You're back to numbers.

[00:36:44] Speaker 05:
And FERC said it examined in detail

[00:36:48] Speaker 05:
how the New England ISO was evaluating need.

[00:36:53] Speaker 05:
And now that it understands that process, all right, the concern it originally had that caused it to initiate this section 206 inquiry has been resolved.

[00:37:13] Speaker 03:
But Your Honor, that only goes to ISO New England's compliance with the tariff as it exists.

[00:37:21] Speaker 03:
As Judge Randolph noted before, there is also a question of how the exemption is working in practice, how the tariff is being implemented.

[00:37:31] Speaker 05:
But that's what it looked at.

[00:37:33] Speaker 05:
And its order on rehearing says it looked in three different regions.

[00:37:40] Speaker 05:
One, it found no problem.

[00:37:42] Speaker 05:
Another, it found a problem and ordered that adjustments be made.

[00:37:47] Speaker 05:
And then in New England, now that it understands how the assessment is made, it was satisfied.

[00:37:57] Speaker 05:
That's all I'm getting at.

[00:37:58] Speaker 03:
But only in New England, Your Honor, was there a showing that there was nearly no competition in competitive development of reliability projects?

[00:38:11] Speaker 03:
And we also have a circumstance where the structure of this process means that the exemption, those data are not going to change going forward.

[00:38:22] Speaker 03:
So since the system operator does not conduct annual needs assessments, it studies needs as they arise, we have a situation where we're identifying needs without any real opportunity to compete for the solutions to solve those needs.

[00:38:38] Speaker 05:
So why didn't your client file its own 206 complaint?

[00:38:45] Speaker 03:
Well, Your Honor, the commission had already instituted a section 206.

[00:38:50] Speaker 05:
But it said it was only addressing concerns it had.

[00:38:57] Speaker 05:
And depending on whether those concerns were resolved or not, then it would proceed appropriately.

[00:39:08] Speaker 05:
Council, I've taken up a lot of your time with my questions.

[00:39:11] Speaker 05:
Is there some point you haven't made that you want to make?

[00:39:16] Speaker 03:
I would just say that the bottom line is that in closing this investigation, FERC ignored much of the evidence in front of it and left in place an exemption that erects a nearly insurmountable barrier to competition in the region.

[00:39:29] Speaker 03:
That's inconsistent with FERC's determination that competition is supposed to be the rule.

[00:39:35] Speaker 03:
And LS Power's petition for review should be granted and FERC's order should be remanded to the agency to re-examine the evidence

[00:39:41] Speaker 03:
and reach a defensible conclusion on each of the questions asked, not just the question about compliance with the tariff, because the orders on review do not do so.

[00:39:50] Speaker 03:
Thank you.

[00:39:51] Speaker 05:
Thank you.

[00:39:52] Speaker 05:
All right.

[00:39:52] Speaker 04:
Council for FERC.

[00:39:57] Speaker 04:
Good morning.

[00:39:58] Speaker 04:
Carol Danza for the commission.

[00:40:00] Speaker 04:
I would have started with paragraph 23 in the rehearing order, but I would also like to point the court's attention to paragraph 60 in the termination order, which begins at JA 373.

[00:40:12] Speaker 04:
where the commission explains, consistent with going all the way back to order 1000, that the commission is focused not on the numerical outcomes, but on the process.

[00:40:23] Speaker 04:
It was always interested in this case, in the processes that these regional organizations were using.

[00:40:31] Speaker 04:
And by the way, order 1000 also said quite a bit about

[00:40:35] Speaker 04:
be different regions having their own unique processes and I have quite a few sites for that if it's useful but on the process versus substantive outcomes in this order the commission cites order 1000 paragraph 12 order 1000 also said it paragraph 113 it said it again in 1000a at 188 and 285 and this court even cited it in the South Carolina decision

[00:40:58] Speaker 04:
At 762 f 3058 so from the start, the commission has looked at the principles that it laid out in order 1000 and the procedures that it examined in the various regions compliance proceedings.

[00:41:11] Speaker 04:
as what is the process that you're going to use to comply with these principles?

[00:41:18] Speaker 04:
And we have an expectation of what the outcomes will be, but it's based on the process.

[00:41:24] Speaker 02:
So in the show cause order, what was the page again in the joint appendix that you saw?

[00:41:31] Speaker 04:
Paragraph 60 of the termination order, that was at 373 and 374.

[00:41:36] Speaker 04:
Okay, thank you.

[00:41:37] Speaker 04:
Of course.

[00:41:41] Speaker 04:
And so going back to the show cause order, the commission as part of its ongoing oversight, because it does have a responsibility that takes seriously to oversee its regulatory initiatives, including order 1000.

[00:41:56] Speaker 04:
So what it had available was annual filings that it had required.

[00:42:00] Speaker 04:
And as well as public websites and information that was available to anyone.

[00:42:05] Speaker 04:
So from sort of the 10,000 foot view, the commission really was only seeing outcomes and it had some concerns.

[00:42:13] Speaker 04:
It wanted to see if the processes were being used properly.

[00:42:17] Speaker 04:
So it issued a show cause order invoking its procedural rule.

[00:42:23] Speaker 04:
209, which is 18 CFR 385.209, where the commission can direct a person, here being the organizations, to explain themselves.

[00:42:35] Speaker 04:
And it's said to these regional organizations, at the time there were three organizations that had this exception.

[00:42:42] Speaker 04:
PJAM was the one had been granted first.

[00:42:45] Speaker 04:
I don't know exactly when Southwest Power Pool was granted, but the

[00:42:49] Speaker 04:
New England one was granted partly using the three years that the commission had already adopted in PJM.

[00:42:57] Speaker 04:
Since then, the mid-continent operator has also added the same exception.

[00:43:01] Speaker 04:
I believe an appeal regarding that is in front of this court in a couple of weeks.

[00:43:08] Speaker 04:
I believe in the initial adoption is what's before the court.

[00:43:11] Speaker 04:
So there are now four organizations that have this exception.

[00:43:14] Speaker 04:
all using the same criteria in the same three years, although they all have their own separate processes.

[00:43:20] Speaker 04:
So the commission that show cause order says, each of the three that have it come to us, explain our process, explain how you're implementing these criteria, explain what we're seeing.

[00:43:32] Speaker 04:
And the commission actually said, explain to us that your implementation remains just and reasonable.

[00:43:38] Speaker 04:
Now, of course, that is not the standard that the commission

[00:43:41] Speaker 04:
had it ever made it to a step one finding under section 206, it would have had the burden to show that they were unjust and unreasonable.

[00:43:50] Speaker 04:
But under the show cause regulation, it says to these entities, explain why your tariff remains just and reasonable the way you're applying it.

[00:43:58] Speaker 04:
So they came in.

[00:43:59] Speaker 05:
The petitioner is arguing as his intervener, that as a result of what the commission has allowed, there is literally, virtually,

[00:44:11] Speaker 05:
no competition in New England for these reliability contracts.

[00:44:19] Speaker 05:
And that's just totally inconsistent with any fair understanding of what the words limited exception mean.

[00:44:30] Speaker 05:
And while FERC on rehearing can say, well, we weren't thinking of numbers,

[00:44:36] Speaker 05:
we were thinking of the process because we're concerned about getting these projects in a basis where they can become operational.

[00:44:55] Speaker 05:
And we're satisfied that everybody's following our rule

[00:45:06] Speaker 05:
And we're satisfied that applying this rule with the exceptions, the tariffs remain just and reasonable.

[00:45:17] Speaker 05:
But the argument is you've got a whole region of the country where competition is barred.

[00:45:31] Speaker 05:
How is that for consistent with FERC's overarching obligation?

[00:45:38] Speaker 04:
Well, I would continue in the same paragraph 60 that I pointed to before, and this would be on JA 374 now, that the commission had gotten into the weeds of New England's process in the way it identifies the reliability needs in its needs assessments.

[00:45:54] Speaker 04:
which are rolling reviews that it does of various sub-region study areas.

[00:46:01] Speaker 04:
There are eight or 10, I think, different regions in New England that it does needs assessments for, and they tend to be driven by certain things happening.

[00:46:09] Speaker 04:
Both the Southeast Massachusetts, Rhode Island one, and the Boston 2028 needs assessments were driven by retirements of particular generating resources in those regions.

[00:46:20] Speaker 04:
At the time that New England responded to the show Cause Order, it had completed two needs assessments.

[00:46:28] Speaker 04:
There were various others in stages in the works, but two had been completed and gotten to the point of identifying not just the reliability needs, but the projects developed as solutions to address them.

[00:46:42] Speaker 04:
And one of them had led to, and these are the first two needs assessments that had been completed since the approval of this exception in 2013 or 14.

[00:46:53] Speaker 04:
And the commission said of these two, we're encouraged that one of them led to the region's first competed project.

[00:47:01] Speaker 04:
And that's all in paragraph 60, I think it's discussed elsewhere too, but the commission was pointing to this.

[00:47:07] Speaker 04:
It's not looking at in terms of 30 projects and one.

[00:47:11] Speaker 04:
It looks at the needs assessments that address the number of needs that resulted in a number of projects.

[00:47:17] Speaker 04:
But between these first two needs assessments of however many, it had already resulted in a competed project.

[00:47:24] Speaker 04:
So it is not actually, it's not accurate to say that none of these reliability projects can be competed because it shows.

[00:47:32] Speaker 04:
Well, one out of 30, all right.

[00:47:36] Speaker 05:
That just doesn't seem to be consistent with the notion of a limited exception.

[00:47:44] Speaker 04:
Well, I think the commission looked at it as one out of two, because out of two needs assessments, a project had come out of one of them.

[00:47:52] Speaker 04:
But, but the other answer to that is that the commission had New England and it's all in the joint appendix early on after the show cause order that New England put in quite an extensive narrative explanation of its process and how it works and a list of all the projects and, and you know, what the reliability needs were and,

[00:48:14] Speaker 04:
with quite a bit of detail even more than we need to go into.

[00:48:18] Speaker 04:
And so the commission looked at all that, what kinds of projects are these being used for?

[00:48:23] Speaker 04:
And I don't think anyone has pointed to particular projects that, well, that one looks wrong or that one could have been competed.

[00:48:31] Speaker 04:
But the commission needed an understanding of how the need by dates were being developed.

[00:48:36] Speaker 04:
And the answer under New England's process is that the need by date, and that's not even a specific project, that's a need that's identified.

[00:48:47] Speaker 04:
It could be that a single need could be, two needs could be addressed by one project.

[00:48:51] Speaker 04:
A need doesn't necessarily translate into on a one-for-one basis, a project, because the next part of the process under the tariff is,

[00:49:00] Speaker 04:
the solution study or the competition to develop projects but in the needs assessments the reliability date is tagged as being the date that the needs assessment well if it's not a future need it's tagged as being the date the needs assessment is completed and posted and that's why all of these projects had the same need by date.

[00:49:25] Speaker 04:
And in particular, the Northeast operator explained how it identifies the reliability needs, short circuit needs versus peak load needs.

[00:49:36] Speaker 04:
If it identifies a future reliability need at a minimum load, or I guess, when it identifies a reliability need based on minimum load, that's considered something that could happen now under current system conditions.

[00:49:51] Speaker 04:
So that's considered needed as of today.

[00:49:55] Speaker 04:
But all of that was in New England's explanation.

[00:49:59] Speaker 04:
And the commission recaps quite a bit of it in the orders.

[00:50:03] Speaker 04:
It really got into the weeds of each region.

[00:50:06] Speaker 05:
So is the next step here that petitioner and intervener and others may want to file 206 or rulemaking?

[00:50:22] Speaker 04:
They certainly

[00:50:25] Speaker 04:
I don't know the procedure for.

[00:50:28] Speaker 05:
Well, I'm trying to understand the picture we're getting is that, you know, FERC looked at all this and said everything's fine.

[00:50:36] Speaker 05:
But say the petitioners and intervener.

[00:50:40] Speaker 05:
Well, maybe on the ground, it looks OK when you get into the details.

[00:50:47] Speaker 05:
But looking region wide.

[00:50:51] Speaker 05:
There's no competition.

[00:50:53] Speaker 04:
Well, we certainly don't have, well, we don't have the record here to say that, but yes, they absolutely have the right to file a 206 complaint if they feel they can meet that burden.

[00:51:03] Speaker 04:
And in particular, to the extent the argument is about how the Northeast region conducts its process and changes that should be made to its tariff, the commission explicitly held that that's beyond the scope of this proceeding.

[00:51:18] Speaker 04:
But it certainly could be within the scope of another proceeding that could indeed be a 206 complaint.

[00:51:24] Speaker 04:
All of this was the commission determining for itself whether it saw sufficient evidence for it to move forward with its own on its own initiative.

[00:51:37] Speaker 02:
Could you repeat what you just said?

[00:51:39] Speaker 02:
What was beyond the scope of the proceeding?

[00:51:42] Speaker 04:
Oh, I'll find the exact.

[00:51:46] Speaker 04:
For instance, in the hearing order at paragraph 26 to the extent that some parties were arguing about the reactive nature or of the New England process or the fact that they don't do it every year or every two years.

[00:51:59] Speaker 04:
But the way they do their planning cycles.

[00:52:02] Speaker 04:
Yeah, which, which the commission explained in quite some number of places in orders 1000 1000 a that it wasn't going to tell the different regions.

[00:52:13] Speaker 04:
You have to do it this one size fits all way.

[00:52:16] Speaker 04:
because every region has its own characteristics and its own needs and its own stakeholders.

[00:52:21] Speaker 04:
And the commission was very respectful of each region being able to develop its own processes, which of course do have to be, the commission does have to look at them.

[00:52:30] Speaker 04:
And it did in the compliance proceedings.

[00:52:32] Speaker 04:
In fact, in the New England compliance proceeding, it did order changes to the planning process.

[00:52:37] Speaker 02:
May I, before you go on, what we have before us is just the New England order.

[00:52:45] Speaker 02:
I mean, that's the issue on this petition for judicial review.

[00:52:50] Speaker 02:
But the 206 proceeding or inquiry was against two others.

[00:52:56] Speaker 02:
Has the commission rendered opinions and orders in those two other matters?

[00:53:01] Speaker 04:
Yes.

[00:53:02] Speaker 04:
And we discussed those in our brief.

[00:53:04] Speaker 04:
And I think Judge Rogers was referencing them earlier at the time.

[00:53:07] Speaker 04:
They were also discussed in the rehearing order.

[00:53:11] Speaker 04:
Right.

[00:53:12] Speaker 04:
And as the Southwest Power Pool, the commission issued a fairly short order saying we're satisfied by the explanation.

[00:53:20] Speaker 04:
No one sought rehearing and nothing further happened with that.

[00:53:23] Speaker 04:
As to PJM, the commission, in fact, found that as the second, third, and fourth criteria, which all have to do with transparency and stakeholder involvement, it found in the PJM order, which

[00:53:42] Speaker 04:
We did say in our brief, and it is cited.

[00:53:45] Speaker 04:
I don't have the exact site in the Jay, but it's referenced in the hearing order.

[00:53:50] Speaker 04:
It is I may not have the exact spot flagged.

[00:53:56] Speaker 04:
for that.

[00:53:57] Speaker 04:
But in the PJM order, the commission said PJM is not, we find that PJM is not complying with these criteria and must amend its operating agreement.

[00:54:11] Speaker 04:
It wasn't under the tariff, it was the operating agreement.

[00:54:13] Speaker 04:
PJM made a compliance filing altering its procedures under its operating agreement

[00:54:19] Speaker 04:
the commission approved that on rehearing compliance.

[00:54:23] Speaker 04:
The only rehearing sought in that case was I believe by a LSP or, or an affiliate, um, that wanted more far reaching changes to the criteria.

[00:54:33] Speaker 04:
And as far as I know, no one, uh, sought judicial review of that set of orders.

[00:54:38] Speaker 02:
Okay.

[00:54:38] Speaker 02:
Thanks.

[00:54:41] Speaker 05:
All right.

[00:54:42] Speaker 05:
Anything further?

[00:54:45] Speaker 04:
Uh, I, um,

[00:54:50] Speaker 04:
No, Your Honor, I believe that's it.

[00:54:52] Speaker 04:
Thank you.

[00:54:53] Speaker 04:
Thank you.

[00:54:54] Speaker 04:
All right, council for petitioner.

[00:54:57] Speaker 07:
Thank you, Your Honor.

[00:54:59] Speaker 07:
Just a couple of quick points.

[00:55:03] Speaker 07:
Councilor Banta indicated that what this was about was the process.

[00:55:07] Speaker 07:
Well, that's absolutely right.

[00:55:09] Speaker 07:
There's with that question.

[00:55:10] Speaker 05:
Absolutely what?

[00:55:12] Speaker 07:
Right.

[00:55:13] Speaker 07:
The process doesn't work.

[00:55:15] Speaker 07:
The process that FERC said doesn't do what FERC said.

[00:55:18] Speaker 05:
Council, you've got to help me here.

[00:55:21] Speaker 05:
I mean, the council disagrees with that argument and explained why.

[00:55:26] Speaker 05:
And so if the problem is that there's virtually no competition on these reliability projects in the New England ISO region, then I don't understand where the commission said it wasn't going to deal with that right now.

[00:55:45] Speaker 05:
What it was going to look at was concerns it had

[00:55:49] Speaker 05:
and it was going to address those first.

[00:55:51] Speaker 05:
It did, and it concluded there was no need to amend its rule.

[00:55:55] Speaker 05:
Well, you disagree for various reasons.

[00:55:58] Speaker 05:
Why wouldn't you file a 206 proceeding then, seeking a revision?

[00:56:06] Speaker 07:
If the proof in this case isn't sufficient for the court to send it back, for FERC to change the rules, it's hard to imagine.

[00:56:13] Speaker 05:
Well, that's not the medical aid counsel.

[00:56:15] Speaker 07:
Hypothetically, so one can envision a 206 and it would be on one of two things, either the process as a whole or individual projects as Judge Randolph asked earlier.

[00:56:26] Speaker 07:
With respect to individual projects, these are identified as projects that are needed somewhat immediately.

[00:56:34] Speaker 07:
Now one can question that, but the ability to file a complaint, get a ruling from FERC,

[00:56:39] Speaker 07:
seek rehearing, come up to the court and get a ruling on that on a particular project is almost insurmountable.

[00:56:47] Speaker 07:
That project would be so.

[00:56:49] Speaker 05:
Well, counsel, it's what?

[00:56:51] Speaker 05:
Insurmountable because of cost and delay?

[00:56:53] Speaker 07:
No, because the project would be so far along in its engineering and production that it's not going to be eliminated.

[00:57:01] Speaker 07:
So you can't really challenge this individual project.

[00:57:05] Speaker 05:
So the order you're seeking from this court is the numbers underlie the rationality of FERC's order on rehearing.

[00:57:21] Speaker 07:
Yes, Your Honor, and you noted, I think it was you that noted that the numbers follow the rule.

[00:57:26] Speaker 07:
That's exactly right.

[00:57:27] Speaker 07:
The first criteria in the ISO New England criteria is the need by date.

[00:57:33] Speaker 07:
The record proof is clear that the way that ISO New England does its planning, the need by date is almost always going to be immediate.

[00:57:43] Speaker 05:
So you want it to change its planning process.

[00:57:47] Speaker 07:
We want FERC to change the criteria to get back to what it said would be just and reasonable criteria that limit the use.

[00:57:57] Speaker 07:
And we want you to send it back.

[00:57:59] Speaker 05:
By limit the use in terms of numbers, so that if you're going to have 30 projects, you can't have 29 of them not subject to competition.

[00:58:08] Speaker 07:
That's correct.

[00:58:09] Speaker 07:
And Councilor Banta mentioned that one project was competed.

[00:58:15] Speaker 07:
The record is clear that that was an anomaly.

[00:58:18] Speaker 05:
She made another point.

[00:58:21] Speaker 05:
They were dealing with two assessments and it wasn't like a single project.

[00:58:28] Speaker 05:
It was in that area.

[00:58:30] Speaker 05:
So it's like one out of two.

[00:58:32] Speaker 07:
Well, yeah, her point was that there had been competition in that.

[00:58:35] Speaker 07:
And the record is clear that that competition resulted from an anomaly because ISO New England had entered into a contract to keep a generator online.

[00:58:45] Speaker 07:
Otherwise, it would have fallen into the exception as well.

[00:58:48] Speaker 07:
That's at JA-226.

[00:58:49] Speaker 05:
I know, but it's an anomaly.

[00:58:52] Speaker 05:
So I guess I don't understand why all this wouldn't have

[00:58:57] Speaker 05:
been reason for your client to say, you need to change this and we want to bring a 206 proceeding.

[00:59:06] Speaker 05:
Now that you FERC have satisfied your own concerns.

[00:59:12] Speaker 07:
We don't believe section 206 allows FERC to say these are our concerns versus somebody else's concerns.

[00:59:19] Speaker 05:
Well, it certainly authorizes the commission

[00:59:25] Speaker 05:
to file a 206 proceeding.

[00:59:27] Speaker 05:
And it doesn't say that it's limited in doing so to these two matters.

[00:59:35] Speaker 05:
And FERC was very clear, all right, from the first order where it clearly said what it was going to look at.

[00:59:46] Speaker 05:
And it concluded that having looked, it was satisfied with the exception it had.

[00:59:58] Speaker 05:
And you're just saying it's counterintuitive to have this result?

[01:00:04] Speaker 07:
It's counterintuitive based on the record in this case to have this result.

[01:00:09] Speaker 05:
No, but see, that's my point, Council.

[01:00:11] Speaker 05:
The record in this case, the only record that makes it counterintuitive that you've proposed is that it's 29 out of 30 or 31 projects.

[01:00:21] Speaker 05:
FERC has said the record here shows everybody's complying with the standards and those who aren't, we've directed changes and they've made the changes.

[01:00:34] Speaker 07:
And FERC said in 2014 that those standards are only just and reasonable if they limit the use of the exception.

[01:00:41] Speaker 05:
Okay, we've been over this.

[01:00:42] Speaker 05:
Anything new?

[01:00:44] Speaker 02:
I have a question.

[01:00:46] Speaker 05:
Yes, Judge Randolph.

[01:00:48] Speaker 02:
Yeah, why don't you, I'm not sure you completed your answer for the reason, with respect to a particular project, it's impossible to file a 206 complaint for your company to do it.

[01:01:05] Speaker 02:
And as I understand it, the reason is the project will have been underway and the proceeding will take some time and by the time it's,

[01:01:16] Speaker 02:
completed, no matter which way it comes out, the project is probably already built out.

[01:01:22] Speaker 02:
Is that right?

[01:01:23] Speaker 07:
That's correct, Your Honor.

[01:01:24] Speaker 05:
Why can't you ask FERC to issue a stay?

[01:01:29] Speaker 07:
We theoretically we could but for I think based on the record has rarely if ever done that.

[01:01:38] Speaker 05:
Now you've got a situation where you're saying basically no competition in New England and you want to issue a stay in this particular project and

[01:01:48] Speaker 02:
You wouldn't ask for a stay of a project that's being built because of an immediate reliability concern.

[01:01:57] Speaker 02:
That's where I risk going, Your Honor.

[01:01:59] Speaker 07:
These are supposedly immediate reliability needs.

[01:02:01] Speaker 05:
How are you supposed to get your issue before the commission?

[01:02:04] Speaker 05:
The court often issues stays where the parties on one side or the other think

[01:02:11] Speaker 05:
it's impossible.

[01:02:13] Speaker 05:
I'm just trying to think of ways or the commission could say we're not going to issue a stay or we're going to issue this order allowing the project to go forward subject to the condition that we will develop in the course of examining your client's 206 complaint.

[01:02:35] Speaker 07:
I appreciate the thoughts.

[01:02:38] Speaker 07:
I think it would just be because these are reliability projects and FERC, even in this proceeding, has put reliability over every other concern, including what it said it was balancing, which is competition, that the ability to get a stay in this situation would be insurmountable.

[01:02:57] Speaker 05:
I just gave you an option.

[01:02:59] Speaker 07:
I understand that, Your Honor, but the Court's stepping in to stop about it.

[01:03:04] Speaker 05:
And it does that in a number of situations.

[01:03:07] Speaker 05:
And the project developers take their chances.

[01:03:12] Speaker 07:
Understood.

[01:03:14] Speaker 05:
Okay.

[01:03:16] Speaker 05:
Anything further?

[01:03:17] Speaker 07:
No, Your Honor.

[01:03:18] Speaker 05:
Thank you very much, Counsel.

[01:03:21] Speaker 05:
We'll take the case under advisement.