[00:00:01] Speaker 01: Case number 21-1126, Ed Al, Solar Energy Industries Association, petitioner, versus Federal Energy Regulatory Commission. [00:00:10] Speaker 01: Mr. Marwell for the petitioners, Edison Electric Institute and Northwestern Energy. [00:00:15] Speaker 01: Ms. [00:00:15] Speaker 01: Curley for the petitioner, Solar Energy Industries Association. [00:00:19] Speaker 01: Mr. Fish for the respondent, Mr. Lowe for the intervener. [00:00:25] Speaker 02: Morning, Mr. Marwell. [00:00:26] Speaker 04: Morning, your honor. [00:00:27] Speaker 02: And our one remote council, Ms. [00:00:30] Speaker 02: Curley, can you hear us and see us? [00:00:35] Speaker 02: Yes, everything is working great. [00:00:37] Speaker 02: Thank you. [00:00:38] Speaker 02: All right. [00:00:39] Speaker 02: Why don't you go ahead. [00:00:40] Speaker 04: Thank you. [00:00:41] Speaker 04: Good morning, Your Honors. [00:00:42] Speaker 04: May it please the court, Jeremy Marwell for Petitioners, Edison Electric Institute and Northwestern Energy. [00:00:48] Speaker 04: We'll try to reserve two minutes. [00:00:50] Speaker 04: In 1978, Congress conferred special benefits on small generators whose power production capacity is no greater than 80 megawatts. [00:01:00] Speaker 04: Breaking new ground from 45 years of agency practice and precedent, Perks Borders here awarded qualifying status to a facility that produces twice that much direct current or DC power. [00:01:14] Speaker 04: Those orders should be vacated because first, they're contrary to the plain language of the statutory size cap. [00:01:21] Speaker 03: And second, they arbitrarily depart from the definition of one word in the statute as to whether it's contrary to the statute or not. [00:01:32] Speaker 03: Excuse me, Judge. [00:01:32] Speaker 03: Capacity is the word, right? [00:01:35] Speaker 04: I think it's power production capacity. [00:01:38] Speaker 04: And I think we would read those three words in context and together as a phrase. [00:01:43] Speaker 03: And if you read the word capacity as the mission is now defining it, then this is not contrary to. [00:01:53] Speaker 03: that you just simply a different interpretation. [00:01:55] Speaker 04: That's not correct? [00:01:56] Speaker 04: So I would not agree with that, Your Honor. [00:01:59] Speaker 04: I think first, we think there's a chennery problem with the definition of capacity in the commission's public brief. [00:02:04] Speaker 04: And the commission acknowledges in a footnote that that definition is absent from the orders under review. [00:02:12] Speaker 04: And so I think that's an oddity in a case where the commission is requesting Chevron deference. [00:02:17] Speaker 04: I mean, our basic argument, and I think the commission agrees with us that production [00:02:22] Speaker 04: means creation or generation. [00:02:24] Speaker 04: They explicitly agree with us. [00:02:26] Speaker 04: And power, I think the key part of our argument is that that means, I don't think there's any disagreement on this either, DC or direct current power and alternating current or AC are both forms of [00:02:38] Speaker 04: And so we have offered definitions of the word capacity that align with the statutory context that are ordinary meaning. [00:02:48] Speaker 04: And our basic position is this is a size cap that applies if you are over 80 megawatts of AC or DC. [00:02:55] Speaker 04: And the commission's position we submit is contrary because they say direct current or DC power doesn't count. [00:03:03] Speaker 04: And that, I think, is the crux of the plain language argument. [00:03:07] Speaker 04: There's another oddity, I think, in the commission's position, and that is that the orders focused on the notion of production as send-out or delivery. [00:03:19] Speaker 04: But I think their appellate brief attempts allied the distinction between the statutory word, which is production, [00:03:26] Speaker 04: and the concept of delivery. [00:03:28] Speaker 04: And they say, well, it's only AC power that counts for delivery out to the grid. [00:03:35] Speaker 04: It's only the production of AC power for delivery out to the grid that counts. [00:03:40] Speaker 04: And I think that's, we think that's contrary to the statute because it reads out a meaning of the word power. [00:03:48] Speaker 02: Well, how is that wrong if the power that utilities can be required to purchase? [00:03:55] Speaker 02: There's no question that it's, [00:03:57] Speaker 02: AC power. [00:03:58] Speaker 02: I mean, if this Broadview offered DC power, there would be no requirement that the utilities purchase it, would there? [00:04:10] Speaker 04: Well, under the statute, the utilities have an obligation to purchase [00:04:16] Speaker 04: the net output of the facility. [00:04:20] Speaker 04: And I think this is maybe a helpful distinction because the commission relies on cases from this board and also prior orders that talk about what the utility is required to buy. [00:04:31] Speaker 04: And that's a different textual inquiry. [00:04:33] Speaker 02: But just back up, I mean, I understand that you would distinguish the different provisions, but just for my question, let's say this was an [00:04:42] Speaker 02: 80 megawatt facility with 80 megawatts of solar arrays and no inverter. [00:04:49] Speaker 02: So there's no question that it's small and that it meets the PURPA definition. [00:04:55] Speaker 02: And if Broadview then said, okay, we're small, we qualify, you know, everything in the statute is met. [00:05:03] Speaker 02: You have to buy our power. [00:05:05] Speaker 02: You can purchase inverters and install them. [00:05:09] Speaker 02: What would your position be why the statute prevents that? [00:05:16] Speaker 02: And if it doesn't, it would seem to me that their position that power production capacity refers to AC power finds some support. [00:05:26] Speaker 04: And I'm not fighting the notion. [00:05:27] Speaker 04: I think everyone agrees that AC power is a kind [00:05:30] Speaker 02: Well, is the power that's expected to be delivered on the grid? [00:05:33] Speaker 02: Would you agree? [00:05:34] Speaker 04: Well, if I could, if I could try to comment that question. [00:05:37] Speaker 04: So the regulation that governs our utilities obligation to purchase as it is different. [00:05:45] Speaker 04: And this is 18 CFR 292.303. [00:05:49] Speaker 04: And that says there is an obligation. [00:05:51] Speaker 04: Each electric utility shall purchase [00:05:54] Speaker 04: energy and capacity, which is made available from a qualifying facility. [00:05:59] Speaker 04: And this is the sort of fountainhead of the cases and the commission precedent that the commission relies on here to say, well, there should be symmetry between the size cap, what you have to do to be in the program at all, and what the utility is required to purchase. [00:06:16] Speaker 04: And I think the key textual point is the regulation says made available. [00:06:20] Speaker 04: And that sounds a lot to me like delivery. [00:06:22] Speaker 04: or send out. [00:06:24] Speaker 04: They are making that power available. [00:06:26] Speaker 04: But that's not the text of the threshold qualifying facility definition in the statute, which is power production capacity. [00:06:35] Speaker 04: So it's production versus made available. [00:06:39] Speaker 04: I hope that answered your question. [00:06:41] Speaker 02: I'm not sure that it did, but let's move on. [00:06:44] Speaker 02: I had another question about reading your brief and looking at the facts in the case, it seems that [00:06:52] Speaker 02: Really the gravamen of your position is that Broadview has done something sort of manipulative or devious, artificial. [00:07:01] Speaker 02: And I'm not sure how they have or what in the statute requires non-artificiality. [00:07:12] Speaker 02: It seems like there is this 80 megawatt cap and Broadview has tried to [00:07:19] Speaker 02: deliver power and maximize its capacity factor in doing so, because the low capacity factor is a notorious problem with solar photovoltaic energy. [00:07:33] Speaker 02: And they've been rather clever, but it's business planning. [00:07:36] Speaker 02: It seems like it's the kind of thing we see in almost every case, where somebody says, OK, here's this requirement. [00:07:44] Speaker 02: I'm going to go right up to it. [00:07:45] Speaker 02: And they do comply with a 80-megawatt delivery of power production capacity in the form that is usable. [00:07:58] Speaker 02: So I guess my question was long-winded. [00:08:00] Speaker 02: I apologize. [00:08:00] Speaker 02: My question was about sort of the artificiality or the notion that there's something nefarious going on here. [00:08:07] Speaker 04: Well, I don't think there's anything artificial. [00:08:09] Speaker 04: Our point is not that it's artificial to include inverters. [00:08:12] Speaker 04: you need to do that. [00:08:14] Speaker 04: But what's artificial, or I guess what we try to provide in our brief in terms of context, is that when Congress has provided a numerical threshold, and it was clearly part of the bargain, facilities in this program get very favorable commercial treatment. [00:08:28] Speaker 04: We are legally obliged to buy what they're selling. [00:08:32] Speaker 04: That's unusual in the market. [00:08:34] Speaker 02: And I think- But now you're a little bit undermining your effort to distinguish the two provisions of the statute, because that's exactly right, and you're only having to buy eight. [00:08:42] Speaker 04: Well, I think the point is, when you have a statutory size cap like that, it is important to give meaning to it, even when you have sophisticated, well-counseled developers working to come either right up to, or in our view, beyond. [00:08:59] Speaker 04: And the reality is, and the commission admits this in their orders, this is a very unusual facility in the 44 years of FERPA, because it's got 160 megawatts of solar array. [00:09:10] Speaker 04: That's not something we [00:09:12] Speaker 04: And so I think the point is not that there's ill intent, but that it's important to police what Congress, appeal Congress at when they enacted the statute. [00:09:23] Speaker 04: Could I briefly talk about the second argument, which I never got to? [00:09:28] Speaker 02: We're going to give you more time. [00:09:34] Speaker 02: But on that, I mean, one of the pieces of reasoning in Occidental that the commission relies on in the rehearing orders is that there's nothing in the statute that requires a perfect match between the capacities of different components of a facility and, you know, the [00:09:55] Speaker 02: I can't remember which uses the elevator example. [00:09:58] Speaker 02: You know, you have a bolt and you have a cable. [00:10:01] Speaker 02: And, you know, if one of them is rated higher, like you wouldn't say that the weight rating of the entire elevator is thereby higher. [00:10:08] Speaker 02: It's sort of you look at the common denominator of all the necessary parts and the statute does use the term facility. [00:10:16] Speaker 02: So I guess the question is, is this not at least a reasonable available interpretation? [00:10:24] Speaker 04: So I think if we think no, and there's two, there's a part about the reading of Occidental and Malacca and the commission's orders. [00:10:33] Speaker 04: This gets into my second point. [00:10:35] Speaker 04: But I mean, I think the key point in response to the elevator hypo is that what the statute here, you might say the elevator has a delivery capacity. [00:10:44] Speaker 04: It can deliver you from the first floor to the second floor. [00:10:46] Speaker 04: But here we have production capacity. [00:10:48] Speaker 04: And so what we think the statute is looking for is the generating aspect of the facility. [00:10:54] Speaker 04: That's why we look to the solar array and not the inverters, which even the commission describes in its orders as converging power, not generating power. [00:11:03] Speaker 04: On Occidental and Malacca quickly, what they say and why we think there is an arbitrary and capricious argument separate from our textual argument, even if you disagree with me on plain meaning, is that you can [00:11:16] Speaker 04: net the 80 megawatt calculation by subtracting. [00:11:21] Speaker 04: You start with gross power, and you can net out, or you can subtract, power that's consumed by the facility as part of the power production process. [00:11:30] Speaker 04: So you essentially, the Massachusetts rescue tech case, which is cited at page 46 of our blue brief, I think it articulates the Occidental Malacca test well, and it basically says, [00:11:42] Speaker 04: You're only subtracting things that are internal to the power production process. [00:11:46] Speaker 04: And our position on the second argument is that generating power and then diverting it to the battery to be stored and later delivered to the grid is not a loss or a deduction that's internal to the power production process. [00:12:02] Speaker 04: Why not? [00:12:02] Speaker 04: Because the thing that generates power is the solar array. [00:12:06] Speaker 04: I mean, it's this distinction between production and delivery. [00:12:10] Speaker 02: Well, it's internal to generating power with a higher rated capacity. [00:12:17] Speaker 02: It's a whole system of saying we're going to have more arrays online so that we'll be meeting the 80 even on a dim day. [00:12:29] Speaker 02: We'll be seating the 80 on a really sunny day at noon. [00:12:33] Speaker 02: We'll put that on the battery. [00:12:34] Speaker 02: And we're still at no time ever going above 80. [00:12:37] Speaker 02: And it really seems like it's a problem [00:12:39] Speaker 02: distinct to solar and maybe wind where there are these ebbs and flows because of the resource. [00:12:48] Speaker 04: I think that works, but only if you're viewing what's being produced as AC power, which is, in our view, what's being delivered or sent out, not what's being generated. [00:13:00] Speaker 04: I don't mean to go in circles with you. [00:13:02] Speaker 04: I'm trying to be responsive to the question. [00:13:07] Speaker 06: What's your best argument? [00:13:08] Speaker 06: that Chevron does not apply. [00:13:10] Speaker 06: We have three or four, but what's the best? [00:13:14] Speaker 04: Well, two, I guess. [00:13:18] Speaker 04: First is, and maybe this is just step one of Chevron. [00:13:22] Speaker 04: Plain meaning is for the court, and that's for you to decide first. [00:13:26] Speaker 04: I think the next level argument is [00:13:31] Speaker 04: Really, the heart of the commission's position on appeal is this industry, what they say is an industry-specific definition of capacity. [00:13:37] Speaker 04: And there's this remarkable footnote in their brief where they say that is absent from the order. [00:13:41] Speaker 04: So I think under Chenery, that's a real problem for the court. [00:13:45] Speaker 04: If you're going to reach our Chevron step two argument, which we made both agree, that's pretty classic that you don't defer to an argument that shows up for the first time in an appellate. [00:13:56] Speaker 02: But one could shear away that argument. [00:13:58] Speaker 02: New reliance on that industry specific definition, and I don't read their brief to be saying. [00:14:03] Speaker 02: We think we're cherry barred from relying on everything else. [00:14:08] Speaker 02: We say about power production capacity and why we think it's best defined the way. [00:14:16] Speaker 02: we defined it, and they make arguments about that explicitly in their orders. [00:14:20] Speaker 02: Those are clearly not Channery-Bart. [00:14:22] Speaker 02: So I think you're reading that concession to cover a bigger argument unit than this may be. [00:14:30] Speaker 04: And I didn't mean to overstate. [00:14:31] Speaker 04: I think the footnote, to be fair to the commission, refers to the argument they're making about the industry-specific definition. [00:14:38] Speaker 04: The question then becomes, as you say, Your Honor, how essential is that to their position on appeal, and can you [00:14:44] Speaker 04: somehow charted force that, I guess, avoid stepping on or stepping into that, you know, definitional point. [00:14:51] Speaker 04: But I do think the prominence of that argument in their brief suggests that the Commission views it as important. [00:14:57] Speaker 04: I think if you sheer that away, then you're left with production, power, and our definitions of the word capacity, which [00:15:06] Speaker 04: we think are both consistent with ordinary meaning and consistent with the notion that in a technical context under the Supreme Court's Van Buren decision that you would look to sort of context-specific meanings. [00:15:18] Speaker 04: I think that's how I read Van Buren. [00:15:20] Speaker 04: It says there was a statute about computers. [00:15:24] Speaker 04: And so we're going to look for a meaning that is appropriate in the context of computers. [00:15:28] Speaker 04: And that's what we've done here. [00:15:28] Speaker 04: I think if you look at the dictionary definitions in our blue brief, we are not picking the ones that are obvious [00:15:35] Speaker 04: And under Chevron step one, I think the court, the existence of definitions of something like the word capacity that are just obviously not on point, like the chairperson spoke in his or her capacity as chair, that's obviously not the meaning. [00:15:50] Speaker 04: But I think we can still have a plain language argument. [00:15:54] Speaker 03: If it's generally to be a problem, wouldn't we have to have something involved in what we're deciding here that is not supported by the original decision without regard to how things are [00:16:05] Speaker 03: raised in their. [00:16:08] Speaker 04: Well, I guess I understood generally just until to mean that the court is limited to the reasons that the agency gave any order under review. [00:16:17] Speaker 03: That's what I'm getting to. [00:16:20] Speaker 03: Aren't we really being asked to decide it for the reasons that are consistent with the order under review? [00:16:25] Speaker 04: Well, I didn't see the missions current definition of capacity, which is echoed by interveners in the orders under [00:16:35] Speaker 04: Uh, and so that, that's why we made the Chenri article. [00:16:39] Speaker 06: There's, uh, always so much briefing about the, the meaning of all the key terms, except there's hardly ever any briefing in Chevron cases about what the word ambiguous. [00:16:55] Speaker 06: And the whole Chevron analysis hinges on whether ambiguity is triggered. [00:17:01] Speaker 06: What do you think ambiguity? [00:17:04] Speaker 04: Yes, I think it means that the court first needs to do the detailed textual work of looking at the words that Congress chose. [00:17:16] Speaker 04: And that can include and should include ordinary meaning, dictionary definitions, context, purpose, all the traditional tools. [00:17:26] Speaker 04: And I think it's only after you do that hard work and if you're left with, I think, just [00:17:34] Speaker 04: deep uncertainty about is it this or is it that. [00:17:38] Speaker 04: So I do think that the crux of our lead argument here asks the court to do that detailed work and not just sort of fall back on deference or ambiguity too reactively. [00:17:52] Speaker 04: And I don't mean that as critical in any way of the court. [00:17:55] Speaker 04: I just think that that's how I view it. [00:18:00] Speaker 04: And we think there's enough here in the plain meaning of the statute. [00:18:05] Speaker 04: Thank you. [00:18:06] Speaker 02: All right. [00:18:06] Speaker 02: We will give you the two minutes that you sought. [00:18:10] Speaker 02: We took you off onto a lot of questions that we had, as is our want in this court. [00:18:18] Speaker 02: All right. [00:18:19] Speaker 02: We will now hear from Ms. [00:18:21] Speaker 02: Kerley for the would-be intervenors, Solar Energy Industries Association. [00:18:29] Speaker 08: Yes. [00:18:29] Speaker 08: Good morning, Your Honors. [00:18:31] Speaker 08: May it please the court. [00:18:32] Speaker 08: My name is Heather Kerley. [00:18:34] Speaker 08: I'm counsel for Solar Energy Industries Association. [00:18:38] Speaker 08: And I've let the timekeepers know I'd like to reserve two minutes for rebuttal if possible. [00:18:44] Speaker 08: And just for clarity of the transcript, I'll be referring to the Solar Energy Industries Association by its acronym SEIA, written S-E-I-A. [00:18:54] Speaker 08: Mr. Marwell discussed a breadth of issues with this court, but SEIA's issue is much more limited. [00:19:00] Speaker 08: In its application, [00:19:03] Speaker 08: Broadview Solar presented a fact-specific question regarding a configuration of solar panels, battery modules, transformers, inverters, and associated wiring. [00:19:15] Speaker 08: Broadview Solar then requested that the commission affirm its status as a qualified small power production facility under PURPA. [00:19:26] Speaker 08: Had the agency limited its ruling to the question presented, CO would not be before this court. [00:19:32] Speaker 08: Broadview Solar is not a SIA member and SIA had no interest in the proceeding prior to FERC's initial orders. [00:19:40] Speaker 08: Because in fact, during the pendency of the Broadview proceeding, SIA was actively involved in the first PURPA rulemaking. [00:19:48] Speaker 08: And in the first PURPA rulemaking, the committee- You are aware of background. [00:19:52] Speaker 02: I'm curious as a practical matter, what specifically could you do [00:20:01] Speaker 02: as an intervener that you cannot do as amicus, what is it that that you're seeking to have an opportunity to do in this case going forward? [00:20:13] Speaker 08: Sure, Judge Pollard. [00:20:14] Speaker 08: We're a petitioner in the case and we're seeking a finding that our participation was unreasonably denied in the proceeding. [00:20:23] Speaker 08: If this court remands to the agency, we wish to participate in that remand proceeding because [00:20:29] Speaker 08: We anticipate a similar remand from the Ninth Circuit on this exact statutory phrase. [00:20:35] Speaker 08: We think the issues need to be considered together, or if not considered together, at least foresee to have an opportunity to consider how power production capacity harmonizes with FERC's revised rule defining same site, which is the antecedent of our statutory. [00:20:52] Speaker 02: I can ask a concrete procedural question. [00:20:56] Speaker 02: You would be able to make arguments, legal arguments, if you participated on an amicus basis. [00:21:04] Speaker 02: Is there something record based? [00:21:06] Speaker 02: If there were a remand? [00:21:08] Speaker 02: I mean, when I think about the difference between amicus and intervener, the intervener has a party status. [00:21:13] Speaker 02: It's just, it's puzzling to me what [00:21:17] Speaker 02: What you think is, I understand that you think you were whipsawed between something that you anticipated, if it was going to be raised at all, it would be raised in a rulemaking and not in an adjudication, and that didn't happen, and that seems unusual. [00:21:31] Speaker 02: But when you're seeking intervention, you have to identify some stake. [00:21:37] Speaker 02: And I'm not sure that I understand what's animating CIA in this case. [00:21:42] Speaker 08: I'm sorry, I misunderstood your question. [00:21:44] Speaker 08: Intervention in the agency docket is what you're asking about, or intervention in the agency. [00:21:48] Speaker 08: Isn't that what you're seeking? [00:21:50] Speaker 08: Yes, I'm sorry for misunderstanding the question. [00:21:53] Speaker 08: So, SIA wishes to intervene in the proceeding to have the correct standard developed. [00:21:59] Speaker 08: SIA had submitted a request for rehearing, which was not considered in this proceeding. [00:22:03] Speaker 08: But SIA has a lot to say about the panel rating, the inverters, the wiring, and the transformers, and how that relates to the send-out rule. [00:22:11] Speaker 08: The send out and there's no other party in the proceeding who has the knowledge-based and experience in solar installations as SIA. [00:22:22] Speaker 08: Broadview Solar has its one project. [00:22:25] Speaker 08: And because the send out rule will have an industry-wide application, and is not an intervener, there will be no party to present this information. [00:22:38] Speaker 06: Ms. [00:22:39] Speaker 06: Curley. [00:22:40] Speaker 06: I took Judge Pillard's question to be, why can't you do everything you just said as an amicus? [00:22:46] Speaker 08: In a FERC proceeding, there is no amicus. [00:22:54] Speaker 08: To be able to participate in the proceeding and have our views considered, we have to be an intervener, which is why we're here. [00:23:00] Speaker 08: We had wanted our views considered on some of the issues that were discussed. [00:23:06] Speaker 08: FERC does not consider them unless we are a party. [00:23:09] Speaker 03: How long had the proceeding below been ongoing before you made your application to entertain? [00:23:16] Speaker 08: Sure. [00:23:17] Speaker 08: So the proceeding was initiated shortly after FERC had just released the NOPR. [00:23:23] Speaker 08: It was told for the pendency of about 11 months. [00:23:27] Speaker 08: So nothing had happened. [00:23:30] Speaker 08: FERC's final rule issued. [00:23:32] Speaker 08: And then the broad view order issued. [00:23:36] Speaker 08: When SIA had notice of the Broadview order and its finding, SIA intervened 27 days later. [00:23:43] Speaker 08: We did not have immediate notice of it, but as soon as we did, marshaled the resources of the agency and had a petition to intervene on file in 27 days, which was before we submitted our rehearing request. [00:23:58] Speaker 03: Broadview's qualification as a small entity was before the [00:24:06] Speaker 03: commission in this meeting for something over 11 months before you filed your petition for intervention, right? [00:24:16] Speaker 08: Whether or not the fact specific of these inverters and this wiring met the commission's definition was before the commission. [00:24:26] Speaker 03: What did you understand the goal of the participants in the litigation to be before FERC? [00:24:35] Speaker 08: We understood that they would rule whether or not Broadview specific configuration complied with the send out rule. [00:24:44] Speaker 08: We did not imagine that FERC would reconsider the send out rule as a whole. [00:24:50] Speaker 02: But that was sought. [00:24:51] Speaker 02: EEI explicitly called for abandoning Occidental in its filings in the Broadview docket. [00:24:57] Speaker 02: So I understand that it may not have made sense to you to be closely monitoring that, but that was [00:25:04] Speaker 02: a position that was articulated. [00:25:09] Speaker 02: Presumably the reason we're now so interested in being involved in the case is because you think it could be re-raised. [00:25:16] Speaker 08: There are two issues. [00:25:17] Speaker 08: I would say one, we thought the issue was under consideration in the ongoing rulemaking where a very similar issue was being discussed and this exact statutory phrase was being debated. [00:25:28] Speaker 08: So we had envisioned that those issues would be in our rulemaking proceeding. [00:25:33] Speaker 08: But on your point about EEI, I'll just, you know, EEI was an intervener in that proceeding. [00:25:39] Speaker 08: So the prime applicant and as well as the purchasing utility did not challenge the send out rule. [00:25:46] Speaker 08: Had CEA sought to intervene after EEI's comments, CEA could have, it would have still been late. [00:25:54] Speaker 08: It would have been less late than we are now, but it would have been at a much later stage of the proceeding. [00:26:00] Speaker 03: um whereas when he is not to interview sorry go ahead you are to apply to this issue can you repeat your question i didn't quite hear it what is the i know you were still talking you've never learned that you don't talk while we're interrupting this different rule of courtesy than normal uh what did you understand to be the goal of the station before the commission in this [00:26:31] Speaker 08: I understood the goal of the commission to be to rule on whether Broadview's arrangement of modules, inverters, and panels complied with the send-out rule. [00:26:45] Speaker 03: Why wasn't that sufficient to give you notice that you would be interested in the outcome of the proceeding? [00:26:53] Speaker 08: Well, I would say two things. [00:26:55] Speaker 08: There are thousands of QF documents opened at first. [00:27:00] Speaker 08: and second, we were involved in a rulemaking where the statutory phrase was being considered and we didn't. [00:27:10] Speaker 03: You didn't intervene in this one. [00:27:11] Speaker 03: What is the standard of review that we applied to first decision to not allow your intervention, your untimely intervention? [00:27:19] Speaker 08: An abuse of discretion, your honor. [00:27:23] Speaker 03: We would be saying that is an abuse of discretion, not allow an 11 month late petition because the [00:27:31] Speaker 03: would be intervener did not anticipate the precise results that happened in the proceeding. [00:27:39] Speaker 03: Are we going to make a precedent like that? [00:27:42] Speaker 08: Your honor, we think the error was in failing to consider anything other than timeliness without considering the agency's own role. [00:27:50] Speaker 08: Many of those months the proceeding was told, we thought, pending the outcome of the rulemaking. [00:27:56] Speaker 08: We believe FERC was obligated to consider other factors, such as prejudice, [00:28:00] Speaker 08: And there's a list of factors in FERC's rule as well. [00:28:04] Speaker 08: But considering only timeliness without considering how the agency's own role contributed to that timeliness delay, we think that was the abuse of discretion. [00:28:15] Speaker 08: We do agree that the agency does not have to allow every potential intervener, though I will note that for QFs only, so this particular type of proceeding, [00:28:25] Speaker 08: FERC allows any person to intervene and does not impose the interested person standard. [00:28:33] Speaker 02: I'm really baffled by your standing argument. [00:28:37] Speaker 02: As I understand it, you characterize your injury as having been effectively precluded by raising a merits challenge to the send out rule. [00:28:48] Speaker 02: because it wasn't in the rulemaking, it wasn't in the Ninth Circuit, you didn't get a reason to raise it in the Ninth Circuit case that was briefed before, and then you're excluded from doing it here. [00:29:00] Speaker 02: But loss of a litigation position, I'm not familiar with any case that says that's an Article III injury. [00:29:08] Speaker 02: And I know this is a long question, but the second part of my question is, why wouldn't you claim that the harm is harm to your members [00:29:17] Speaker 02: of having the send out rule on the chopping block. [00:29:22] Speaker 02: It seems like that is the harm, the underlying harm to say is this rule is disastrous for our industry. [00:29:31] Speaker 02: We represent the industry. [00:29:32] Speaker 02: We know that the commission has now ruled and we're hearing in the way that's favorable to us, but this case isn't over yet and we need to be present. [00:29:44] Speaker 02: Why wouldn't that be the injury? [00:29:46] Speaker 02: And if it were, it seems to me you just claimed that injury, which is mystifying to me. [00:29:52] Speaker 02: And that in order to claim it, you would have to identify members and you would have to have a declaration saying, look, I'm planning to build something like what Broadview is building. [00:30:04] Speaker 02: And I clearly would be harmed if the commission or if the court were to rule, the commission were to rule as it did in the initial order. [00:30:15] Speaker 02: I'm just, I'm just not clear why that wasn't your standing on. [00:30:19] Speaker 08: Um, yes, your honor. [00:30:20] Speaker 08: I think this proceeding is and all that underlies this is incredibly unusual, especially in the rulemaking and in this separate adjudicatory proceeding. [00:30:29] Speaker 08: I will note that a number of our members are amicus in support of FERC in this proceeding. [00:30:35] Speaker 08: They do wish to see the send out rule maintained. [00:30:38] Speaker 08: Um, I think we are hoping that this court will [00:30:41] Speaker 08: maintain that send out rule but but you are right if if you do remand and see a would be injured by not being able to participate, though, you know, again, this is one issue in all of purchase. [00:30:54] Speaker 08: Go ahead. [00:30:55] Speaker 02: I don't think it's the failure to participate that's the injury. [00:30:58] Speaker 02: In fact, my, one of my buried questions in my long, in my long discourse was what's, what is your best authority that loss of a litigation position or opportunity is? [00:31:08] Speaker 02: I don't think that is, I think that article three injury would be the ultimate, you know, harm to members and procedural inability to participate to enhance the chance that the outcome would be what you [00:31:23] Speaker 02: But you haven't done what you would need to do to put that in issue. [00:31:28] Speaker 08: So I agree with you that the Article III injury is small. [00:31:34] Speaker 08: And I don't disagree with what you've laid out there. [00:31:38] Speaker 08: And so I don't know if I have more to add to the discussion. [00:31:42] Speaker 06: I was wondering if you could clarify the relationship between this case and the Ninth Circuit case. [00:31:48] Speaker 06: It may not matter, ultimately. [00:31:53] Speaker 06: What's going on there? [00:31:55] Speaker 08: Sure. [00:31:56] Speaker 08: We're waiting a decision after oral argument and briefing has been completed, and we're waiting a decision from the court. [00:32:02] Speaker 06: I thought you said you were expecting a remand in the Ninth Circuit. [00:32:06] Speaker 08: I think we are hopefully expecting a remand, yes. [00:32:16] Speaker 02: Great. [00:32:17] Speaker 02: As we did for Mr. Marwell, we'll give you a couple of minutes for rebuttal. [00:32:22] Speaker 02: And we'll hear now from the commission for Mr. Fish. [00:32:40] Speaker 00: Good morning, Your Honors. [00:32:40] Speaker 07: May it please the Court, Jared Fish, for the Commission. [00:32:44] Speaker 07: There are two ways that the Commission wins in this case. [00:32:46] Speaker 07: One focuses on the term power production capacity, and the other focuses on the term power production capacity in terms of the facility as a whole, beginning with the first basis. [00:32:57] Speaker 07: In our orders, this is important, in our orders, we define power production capacity as both output in a form useful to an interconnected entity. [00:33:07] Speaker 07: That's a paragraph 18 of our secondary hearing order, JA 283. [00:33:11] Speaker 07: In our brief, we provide technical definitions of the term capacity in the context of power production that accord with the rationale we provide in our orders. [00:33:21] Speaker 07: The Energy Information Administration, the premier source of energy information and statistics, [00:33:26] Speaker 02: Sorry, I just have one request for you. [00:33:29] Speaker 02: We're not a time stickler court, and I think it would help if you spoke a little more slowly. [00:33:36] Speaker 07: Oh, I'm sorry. [00:33:38] Speaker 02: Sorry. [00:33:38] Speaker 07: I will be more deliberate. [00:33:43] Speaker 07: So in our brief, Your Honor, we define the term capacity in the context of power production in a way that accords with the rationale we provide in our orders. [00:33:55] Speaker 07: The Energy Information Administration defines capacity in the power production context to mean, quote, maximum output that a generating equipment can supply to system load. [00:34:06] Speaker 07: System load is demand that can actually use energy. [00:34:10] Speaker 07: The only output from the Broadview facility that can supply system load is 80 megawatts, because that is its only alternating current output. [00:34:18] Speaker 06: The statute that says facilities power capacity [00:34:25] Speaker 06: does not say AC power production capacity. [00:34:32] Speaker 06: It seems like the phrase power production capacity would cover AC or DC. [00:34:39] Speaker 07: I disagree, Your Honor. [00:34:40] Speaker 07: If the statute said maximum power production, then perhaps, because power is DC or AC. [00:34:46] Speaker 07: But it's talking about capacity. [00:34:48] Speaker 07: What type of capacity, as Mr. Marvel stated, there are lots of different definitions of the word capacity. [00:34:53] Speaker 07: It can mean the legal mental state to enter into a contract. [00:34:58] Speaker 07: Obviously, that's not the definition here. [00:35:00] Speaker 07: Congress clarified what definition pertains by proceeding the word capacity with power production. [00:35:05] Speaker 07: What type of capacity relates to power production? [00:35:08] Speaker 07: the output that serves system load. [00:35:10] Speaker 07: Their definition, by contrast, hits the words power production against the word capacity. [00:35:16] Speaker 06: Could you address the hypothetical that is in Edison's brief where they talk about this actual facility? [00:35:27] Speaker 06: California has a 579 megawatt, five square mile solar facility. [00:35:34] Speaker 06: And they say under your theory, you could [00:35:38] Speaker 06: send out 80 of that. [00:35:40] Speaker 06: And you could use, I guess, the other 499 without sending it to the grid. [00:35:45] Speaker 06: You know, you could power a factory or something. [00:35:51] Speaker 06: And that would still qualify as a small facility under your approach. [00:35:58] Speaker 07: No, Your Honor, I disagree. [00:36:00] Speaker 07: It most likely would not qualify as a facility. [00:36:01] Speaker 07: Why is that? [00:36:02] Speaker 07: The reason is because there the useful output, the output that can serve system load would be a combination of the 8 megawatts alternating current released from the inverters combined with whatever other output goes to a factory. [00:36:15] Speaker 06: So in that case, and that's, I mean, I think that's correct that that's the way it should be, but you're not making everything depend on what is sent out to the grid. [00:36:27] Speaker 07: Right. [00:36:28] Speaker 07: Well, send out is shorthand for what the useful output of a facility is. [00:36:33] Speaker 07: I mean, that's what Occidental, Malacha, Pentech papers are talking about. [00:36:37] Speaker 07: They're talking about the ability to displace otherwise derived possible. [00:36:40] Speaker 06: So in terms of what the facility produces, that's useful. [00:36:47] Speaker 06: The I have a math equation in my head. [00:36:50] Speaker 06: I'm not. [00:36:51] Speaker 06: Yeah. [00:36:51] Speaker 06: Well, I'm worse. [00:36:52] Speaker 06: I don't. [00:36:53] Speaker 06: But it's 80 plus 50 equals more. [00:36:57] Speaker 06: And I want you to tell me why this math equation does not solve the case. [00:37:02] Speaker 06: 80 plus 50 equals 130. [00:37:05] Speaker 06: At any one moment, the plan to question Broadview is producing 80 that it immediately delivers. [00:37:16] Speaker 06: It's producing 50 that it stores in the battery and later delivers. [00:37:22] Speaker 06: So at any one moment, [00:37:24] Speaker 06: It's producing 80 plus 50 and all 130 eventually gets delivered. [00:37:30] Speaker 07: That's incorrect for two reasons. [00:37:33] Speaker 07: First, when we're talking about useful power, we're only talking about alternating current power and the 50 megawatts that's stored in the battery is direct current power. [00:37:44] Speaker 07: It's not useful to anybody, at least not with the Broadview facility and how it's connected to the grid. [00:37:50] Speaker 07: And the second point is, as soon as you start talking about amount that can be sent out over time, we're in a whole different realm. [00:37:59] Speaker 07: We're talking about electric generation. [00:38:01] Speaker 07: We're no longer talking about capacity. [00:38:03] Speaker 07: Electric generation measures delivery of energy over time, and it's measured in megawatt hours. [00:38:10] Speaker 07: Here we're talking about capacity megawatts. [00:38:12] Speaker 07: And the only useful power that the whole facility can supply at any one time is 80 megawatts. [00:38:18] Speaker 07: That much is undisputed. [00:38:19] Speaker 07: The utilities even admit in their brief that from Northwestern's perspective, they're only getting 80 megawatts of capacity. [00:38:27] Speaker 06: Maybe I can get on board with everything you just said. [00:38:29] Speaker 06: In order for me to get on board, do I have to conclude that DC power is not power? [00:38:39] Speaker 07: DC power is power. [00:38:40] Speaker 07: But the question here is, what does the term capacity mean in terms of power production? [00:38:46] Speaker 07: Capacity relates to useful output, output that can serve system load. [00:38:50] Speaker 07: So we're not quarreling with the fact that DC power is power. [00:38:52] Speaker 07: But I think we have to take this. [00:38:55] Speaker 06: No product is useful until it's delivered to its user. [00:39:00] Speaker 06: So if I have a factory that makes widgets and I make 130 at a time, 80 of which I deliver [00:39:08] Speaker 06: Out the door that minute 50 of which I deliver later on in the evening. [00:39:13] Speaker 06: None of those are useful widgets until they're used by the until they're until they're obtained by the user. [00:39:21] Speaker 07: No, Your Honor, respectfully, that actually does talk about delivery versus output. [00:39:27] Speaker 07: And our orders are very clear. [00:39:28] Speaker 07: We're not talking about delivery. [00:39:29] Speaker 07: We're talking about output. [00:39:30] Speaker 07: In that example, I assume we're presuming that the widgets are complete upon production, whether they're stored or not. [00:39:38] Speaker 07: So if you had 160 widgets that were produced, notwithstanding that 50 of them are stored somewhere, [00:39:44] Speaker 07: Those are useful widgets. [00:39:46] Speaker 07: Maybe you haven't delivered them yet, but they're still useful widgets. [00:39:48] Speaker 07: Here, the 160 megawatts of direct current power isn't useful until something else happens, until the inverters convert that power into alternating current. [00:39:58] Speaker 07: I know I just used the word convert, but I'd like to make one very important clarification. [00:40:03] Speaker 07: The inverters are electric generating equipment. [00:40:07] Speaker 07: We make that point at paragraph 33 of our first re-hearing order, J8207. [00:40:12] Speaker 07: It's also codified in our regulations and I'll say it slowly because this is not in our brief. [00:40:17] Speaker 07: 18 CFR section 292.202 subsection T defines electric generation equipment to include inverters. [00:40:27] Speaker 07: So this fills into the second way that we went to our production capacity of the facility as a whole. [00:40:35] Speaker 07: Well, as we explained paragraph 24 of our first hearing order, if you look at the facility as a whole, you look at all the electric generation equipment involved. [00:40:43] Speaker 07: So we reasonably considered both the inverters and the solar array and gave meaningful effect to both. [00:40:49] Speaker 02: I have a question about Chevron step one, step two. [00:40:59] Speaker 02: And partly about the exercise of agency expertise. [00:41:03] Speaker 02: So is power production capacity a phrase that's best where it's given to the agency to exercise its expertise in interpreting it? [00:41:18] Speaker 07: I believe so, your honor, at least in the first instance, obviously, it's the court at the end of the day that has final say over what statutory terms mean. [00:41:28] Speaker 07: But, you know, here, I think that we reasonably interpreted a technical term, which is within the agency's ambit. [00:41:36] Speaker 07: And I'll note also this is not as, you know, [00:41:39] Speaker 07: opposing council said, this is not the first time we've come up with this rule. [00:41:42] Speaker 07: We've adhered to the rule that it's useful output, the amount of power that can be displaced on a grid as the test for power production capacity for over 40 years. [00:41:52] Speaker 07: And to the extent that they argue that, well, we can't rely on our technical definitions because it's not clear that they existed in the same form in 1978, that's also incorrect. [00:42:02] Speaker 02: I think their more powerful argument is you can't rely on your technical definition because you raised it in the brief and it wasn't relied on as you yourself [00:42:10] Speaker 02: concede in page 40 footnote nine of your brief, this is a litigation raised point. [00:42:18] Speaker 02: I was surprised that that was your leading point in your argument today. [00:42:21] Speaker 02: So what is your claim for deference that excludes that US EIA definition? [00:42:33] Speaker 07: Well, it's the definition that we provide in our quarters paragraph, 18, the secondary hearing order output power production capacity means to output in a form that's useful to the interconnected entity. [00:42:44] Speaker 07: And that definition is based on a congressional intent, which is the load star of any statutory analysis. [00:42:51] Speaker 07: The whole intent. [00:42:52] Speaker 07: behind PURPA, at least as concerns small power production facilities, is to displace fossil fuel fire power on the grid. [00:43:00] Speaker 02: Well, the only way that you're going to... What's the expertise, though? [00:43:04] Speaker 02: Congressional intent is something that we also look to. [00:43:07] Speaker 02: So when you talk about being entitled to use [00:43:12] Speaker 02: the agency's expertise in interpreting power production capacity, and that's a compelling argument for Chevron deference. [00:43:20] Speaker 02: I'm interested in having you help us identify in a more kind of specific way what expertise bears on the interpretation in this case and help us see in the orders how that was manifest. [00:43:34] Speaker 07: Yes, there's pillar. [00:43:35] Speaker 07: I think the expertise comes to bear on the arcane nature of power, how you can have, you know, [00:43:43] Speaker 07: direct current power produced in one part of the facility and how that's transformed into alternating current power to another part, whether that conversion process actually is production in and of itself. [00:43:54] Speaker 07: I think all of those questions pertain to our knowledge of how electric projects, particularly solar photovoltaic projects operate in the real world. [00:44:05] Speaker 06: Can you square that answer with your statement in Phenon 9 of your brief and you're talking about [00:44:13] Speaker 06: the meaning of capacity, quote, capacity, and you say it turns on legal principles of the sort that a court usually makes, here's, I think, the money phrase, and not determination specifically entrusted to an agency's expertise. [00:44:31] Speaker 07: Right. [00:44:34] Speaker 07: Honestly, I wish almost that we hadn't included this. [00:44:37] Speaker 07: It's a little bit self-conscious and I don't think it's particularly necessary because all that footnote... Sometimes a gaffe is telling the truth when it's not in your interest. [00:44:52] Speaker 07: I mean, the end of the footnote says, you know, the utilities are wrong that the commission is barred from offering additional legal arguments on appeal that support the commission's statutory interpretation. [00:45:01] Speaker 07: So all we're saying there is, look, we realize that these additional definitions are not included in our orders, but they bolster the reasonableness of the statutory interpretation that is in our orders. [00:45:14] Speaker 07: And the question for Chevron deference is whether our statutory interpretation is reasonable. [00:45:19] Speaker 06: And that's Chevron step two. [00:45:21] Speaker 06: Sheffield step one is whether you just lose on the plain meaning of the term. [00:45:27] Speaker 06: And I do think your answers earlier were helpful to me at least in explaining that you're not depending on a conflation of the words production and delivery. [00:45:40] Speaker 00: Right. [00:45:40] Speaker 06: But now it seems like you are depending on a conflation of the word production and conversion. [00:45:48] Speaker 06: And I don't see how that is consistent with the plain meaning of production. [00:45:53] Speaker 07: Well, this goes back to our second basis for prevailing here. [00:45:58] Speaker 07: Talking about power production capacity of the facility, not of a self-component part, not of the solar array. [00:46:04] Speaker 06: Facility's production strikes me as a different thing than conversion of what a facility produces. [00:46:13] Speaker 07: Well, [00:46:14] Speaker 07: Two things can be true at the same time, that the inverters convert direct current power to alternating current power. [00:46:20] Speaker 07: The facility as a whole produces 80 megawatts of alternating current power. [00:46:25] Speaker 07: You know, I think that the point there is [00:46:27] Speaker 07: We always come back to what is the facility producing. [00:46:31] Speaker 07: The utilities want to focus on just a sub-component part, the solar array, but they completely ignore part of the facility. [00:46:38] Speaker 07: Indeed, they completely ignore a component that is part of the electric generation process. [00:46:43] Speaker 07: As we stated, paragraph 33 of our first hearing order, that's recounted at page 39 of our brief as well, and as is codified in our regulations. [00:46:52] Speaker 07: So, you know. [00:46:54] Speaker 02: Let me ask you, Mr. Fish. [00:46:56] Speaker 02: Just to change gears a little bit, I just had one question about the intervention. [00:47:02] Speaker 02: I know that the decision to deny intervention is subject to a steep standard of review. [00:47:09] Speaker 02: It depends on whether there's an abuse of discretion. [00:47:11] Speaker 02: But I find myself wondering what would have been the prejudice, if any, of allowing SEIA to intervene wasn't part of the time delay during a period when proceedings were told. [00:47:26] Speaker 02: It's a little surprising to me, frankly, what the commission did. [00:47:30] Speaker 02: And I wonder if you can help explain why in this unusual situation the commission wouldn't have [00:47:44] Speaker 07: Well, Your Honor, that would have opened a new door and set a new precedent. [00:47:49] Speaker 07: I mean, we have consistently denied late intervention after dispositive order. [00:47:53] Speaker 02: I understand that. [00:47:54] Speaker 02: That's why I emphasize this unusual situation when it may have not been a full exercise of diligence, but it was explicable. [00:48:07] Speaker 02: that SEIA thought, oh, this kind of big deal thing, yeah, but pending rulemaking, it's going into this very area. [00:48:14] Speaker 02: If they're going to change this, they're going to do it in the rulemaking, not in one of these many dozens of individual adjudications. [00:48:22] Speaker 02: I mean, so they were wrong. [00:48:23] Speaker 02: And so I could see a rule that's very narrowly key to this somewhat unusual way that the commission proceeded. [00:48:33] Speaker 07: It could be your honor, and I think the court would probably have pulled that decision. [00:48:36] Speaker 07: But if you look at the regulation for late intervention, it says that we may consider several factors. [00:48:42] Speaker 07: One of those is prejudice. [00:48:44] Speaker 07: Another is good cause. [00:48:46] Speaker 07: And we don't have to consider both. [00:48:47] Speaker 07: We don't have to consider either. [00:48:49] Speaker 07: Here, we said there's no good cause. [00:48:50] Speaker 07: And there's good cause for saying there's no good cause because see, even in July of 2020, when Order 872 and the other proceeding came out, clarifying and making final that that proceeding would not consider the send out rule, [00:49:09] Speaker 07: They still didn't intervene. [00:49:10] Speaker 07: They still didn't intervene before we issued our order here in September. [00:49:14] Speaker 07: They waited over two months until September 28, 2020. [00:49:17] Speaker 07: So they were on notice. [00:49:19] Speaker 07: In July of 2020, they were actually on notice back in October of 2019 when EEI raised this issue in their intervention motion. [00:49:27] Speaker 02: So was EEI raising, I assume EEI was raising this issue in any number of other, uh, [00:49:34] Speaker 02: applications for, I'm going to use the wrong terminology, applications for certification, that there are these dozens and dozens of these facilities and they're seeking to be recognized as small power production facilities. [00:49:47] Speaker 02: So EI is probably raising this everywhere. [00:49:50] Speaker 02: Would you expect the SCIA to be intervening in all of those proceedings? [00:49:56] Speaker 07: Not necessarily, Your Honor, but I think even if you don't take the October 2019 date as the basis for good cause, the July 2020 date certainly provides it. [00:50:09] Speaker 07: Because then they knew, they knew that the order 872 proceeding wouldn't have any bearing on the send out. [00:50:17] Speaker 02: So they probably thought they were in the clear altogether. [00:50:20] Speaker 02: What's odd was then given that, [00:50:24] Speaker 02: I think they thought they were home free. [00:50:25] Speaker 02: And then, whoa, this thing that you would think they would have done, if at all, they would have done in a rule, they decide to do in one of however many dozens of adjudications? [00:50:38] Speaker 02: So that, I think, I mean, I'm just trying to understand there. [00:50:40] Speaker 07: I understand the equity point, Judge Miller, but I think, you know, at the end of the day, this is a fundamental tenant of administrative law. [00:50:47] Speaker 07: We can make new policy through rule makings or we can make it through adjudication. [00:50:51] Speaker 07: And that discretion does not turn on the number of dockets that are open that might concern the same issue. [00:50:57] Speaker 07: That's really a question of, you know, whether there should be a statutory change or regulatory change that would bind us. [00:51:05] Speaker 07: But I think it's important [00:51:07] Speaker 07: You know, this could be a case where, you know, assuming for the moment favorable facts to see it could create bad law, because that would potentially open the floodgates to us being required to grant intervention after a dispositive order issues in all sorts of cases, because we have lots of dockets open that deal with similar issues. [00:51:28] Speaker 07: And, you know, [00:51:29] Speaker 07: then there is the potential for very real prejudice. [00:51:33] Speaker 07: And I don't think that's consistent with the regulation that is written in permissive terms in any event. [00:51:43] Speaker 02: Could you prevail on Chevron 1? [00:51:46] Speaker 02: I mean, do you need the deference? [00:51:49] Speaker 07: I don't think we need the deference. [00:51:51] Speaker 07: As we explained in paragraph 23 of our first re-hearing order, the most reasonable interpretation of power production capacity of the facility is 80 megawatts, because that's the amount of useful power output. [00:52:05] Speaker 07: And that considers all of the component parts of the facility as a whole. [00:52:09] Speaker 07: But I think Chevron deference is, I think step two, is a reasonable place to land in this case, nevertheless. [00:52:19] Speaker 07: Because we are talking about terms, power production capacity of a facility in a rather sui generis situation where you have both DC power and AC power. [00:52:32] Speaker 07: I think it's important to remember in the past, we're just talking about AC power. [00:52:40] Speaker 07: I don't know another occasion where we're talking about the conversion issue. [00:52:44] Speaker 07: And so the question was just, well, how much is being sent out to the grid? [00:52:47] Speaker 07: You didn't have this component that Congress did not anticipate back in 1978. [00:52:53] Speaker 07: Nevertheless, Congress charted a path forward by using the term power production capacity of a facility. [00:53:00] Speaker 07: It clearly wanted to focus on displacing fossil fuel firepower on the grid. [00:53:04] Speaker 07: The maximum ability of the Broadview facility to do that is 80 megawatts. [00:53:08] Speaker 06: Can you clear? [00:53:09] Speaker 06: I didn't have any more, but then your response to Judge Pillard led me to seek this clarification. [00:53:17] Speaker 06: Do you think you should win at Chevron Step 1? [00:53:21] Speaker 06: I know if you lose there, you think you should still win at Chevron Step 2. [00:53:26] Speaker 06: Do you think you should win at Chevron Step? [00:53:30] Speaker 07: I mean, [00:53:32] Speaker 07: Start by saying, I think we should win either way the court looks at it. [00:53:35] Speaker 07: I think if you take, say, the Kaiser versus Wilkie tests for deference to an agency's regulations, and you employ all the canons of statutory construction to determine the best meaning, I think you get to the most reasonable outcome here as being our determination. [00:53:54] Speaker 07: 80 megawatts. [00:53:55] Speaker 06: Reasonable has shades of Chevron step two. [00:53:59] Speaker 06: Maybe the answer is yes, maybe the answer is no, maybe the answer is he would rather not give an answer. [00:54:05] Speaker 06: But yes or no, do you think you should win at Chevron step? [00:54:08] Speaker 06: I definitely think we should win at step one. [00:54:10] Speaker 06: I also think we should win it. [00:54:12] Speaker 03: I want to be sure I understand the question and answer that's going on here. [00:54:16] Speaker 03: If there were no Chevron case, we were simply deciding the law in the first instance. [00:54:22] Speaker 03: This is 1983, we're before Chevron, and we're deciding the question as a matter of law. [00:54:32] Speaker 03: arrived at in this case. [00:54:33] Speaker 03: Yes, yes, absolutely. [00:54:35] Speaker 03: That makes you understand where we're going with that question. [00:54:39] Speaker 07: Congress's intent under purpose imports with a plain text reading of the statute when read in context. [00:54:44] Speaker 07: And if I could just make one, I'm sorry. [00:54:48] Speaker 02: We make your final point. [00:54:51] Speaker 07: My final point would be until this case, Northwestern seemed to agree with us. [00:54:56] Speaker 07: Because in their own interconnection procedures, they say you calculate nameplate capacity, which is their load star, in terms of the alternating current generation of the facility. [00:55:06] Speaker 07: And in their interconnection agreement, in this case, they said it's an 80 megawatt plant. [00:55:12] Speaker 07: Thank you, Your Honors. [00:55:13] Speaker 02: Thank you. [00:55:17] Speaker 02: Great. [00:55:18] Speaker 02: And finally, we'll hear from Mr. Lowe from Broadview Intervener. [00:55:24] Speaker 02: Good morning. [00:55:28] Speaker 05: They please the court Robert Lowe for the intervener. [00:55:31] Speaker 05: The question here is whether the power production capacity of the power production facility to be measured by the potential capacity of a sub component of that facility or should be measured by looking at the facility as a whole. [00:55:46] Speaker 05: And it's really not unreasonable for the commission to take the latter view. [00:55:50] Speaker 05: It's reasonable because the statutory language itself is key to the facility. [00:55:54] Speaker 05: It says a facility, which has the power production capacity, which is not greater than 80. [00:55:59] Speaker 05: So looking at what the facility, looking at all the components together, what the production will be here. [00:56:04] Speaker 05: Everyone agrees that it is never greater than 80 megawatts. [00:56:08] Speaker 05: This is consistent. [00:56:09] Speaker 05: It's reasonable because it's consistent with the commission itself for 40 years. [00:56:12] Speaker 05: And you'll look at the net output of the facility as a whole. [00:56:16] Speaker 05: As the Commission said, even the dissenting Commissioner Danley viewed capacity to referring to output. [00:56:21] Speaker 05: And as the Commission explained at page 207 of the Joint Appendix, that means looking at, in this statute, the output of the facility, not a subcomponent. [00:56:29] Speaker 05: And as the Commission just said, that's how Northwestern understood it. [00:56:32] Speaker 05: Look at page 207 of the Joint Appendix, footnote 94, which explains that. [00:56:38] Speaker 05: It's also consistent with this Court's reading of this statute. [00:56:42] Speaker 05: As judge Brown said in the Southern California case, while he had a qualified by the net output and judge Brown explained that this accords in the context of this statute that you're they're looking at power production. [00:56:57] Speaker 05: They can actually contribute to the system, which means power that is useful. [00:57:00] Speaker 05: It can be used by the greater and some other useful capacity. [00:57:04] Speaker 05: It also makes perfect sense in the context here where Congress is trying to incentivize the addition of additional domestic power to the grid, not some fictional power that is never produced in a useful fashion. [00:57:17] Speaker 05: It's also reasonable because it's consistent with how Congress used the term. [00:57:20] Speaker 05: And per bit also speaks to sales of capacity. [00:57:23] Speaker 05: Yes, capacity of energy going to the grid and sold from one company to another. [00:57:26] Speaker 05: If you look at 16 USC 824A, there's a number of provisions there all speaking to the sales of capacity. [00:57:33] Speaker 05: None of that makes sense if you're thinking of capacity in terms of a subcomponent. [00:57:38] Speaker 05: Just three other additional quick points. [00:57:41] Speaker 05: When Congress enacted the statute, it also included other sources of power, such as hydro power, geothermal power, bio waste. [00:57:51] Speaker 05: Those can potentially run 24 hours a day, 7 days a week, 365 days, 80 megawatts all the time. [00:57:58] Speaker 05: In the solar world, it's more challenging to have that level of capacity factor. [00:58:03] Speaker 05: But it shows that it's certainly not inconsistent with congressional aim here to have a facility which it can get a greater capacity factor to produce for more hours. [00:58:12] Speaker 05: So it's fully anticipated by Congress. [00:58:14] Speaker 05: It might even go up to 24 hours a day, seven days a week, 365 days a year. [00:58:20] Speaker 05: And so it's not circumventing or gaining the statute to design a facility. [00:58:24] Speaker 05: So we can try to get close to the 80 megawatts. [00:58:27] Speaker 06: What's your response to Edison's argument, the utilities argument, that the statute refers to transmission capacity a handful of times. [00:58:37] Speaker 06: And so we should read production capacity as different than transmission capacity. [00:58:44] Speaker 05: We're referring to production capacity of the facility. [00:58:48] Speaker 05: So what is leaving the facility? [00:58:51] Speaker 05: That sounds like transmission. [00:58:53] Speaker 05: What is leaving the facility? [00:58:54] Speaker 05: Or, in your hypothetical, if it's being used by a direct customer in some other way, it's where the power is then being still used in a useful fashion, that might be included as well. [00:59:06] Speaker 05: So it's a question to ask a facility, what is it producing that is useful to the grid or to some direct customer, right? [00:59:13] Speaker 05: As opposed to in some other hypothetical, you have a solar array there, which is producing power. [00:59:21] Speaker 06: In my hypothetical, the 499 would be transmitted. [00:59:25] Speaker 06: It just wouldn't be transmitted to the grid. [00:59:28] Speaker 06: So I still think that you are conflating [00:59:34] Speaker 06: a facility's power production capacity with a facility's power transmission capacity. [00:59:43] Speaker 06: And that seems problematic because this Congress has distinguished elsewhere between production and transmission. [00:59:51] Speaker 05: And let's talk about the hypothetical. [00:59:52] Speaker 05: I think it's a helpful illustration. [00:59:54] Speaker 05: So if you have a facility which is producing 570 or whatever they said of megawatts of power from their huge solar array, [01:00:04] Speaker 05: And that is then going through inverters and being delivered at 570 for different uses. [01:00:12] Speaker 05: So if it sends out 80 to the grid and then uses, you said 490 internally, let's say they have a, you know, some sort of pit mining farm. [01:00:23] Speaker 05: facility there as part of the same facility. [01:00:25] Speaker 05: It's being used, I'm sure that's not this case, but FERC would look at those facts and say that energy, that AC power is being used internally by direct customer, that's being treated as useful power that is being produced by the facility as a whole. [01:00:40] Speaker 05: So whether it's being directed to the grid or elsewhere, that's something that FERC would look at. [01:00:43] Speaker 06: In this case, what if the bit mining farm used DC power? [01:00:51] Speaker 06: Would that still count as power production capacity? [01:00:54] Speaker 05: That's not how it works. [01:00:57] Speaker 05: If it did work that way, Burke would examine it. [01:01:00] Speaker 05: They're the expert agency, and they would assume to treat it as useful power. [01:01:05] Speaker 05: In use in that fashion would take that into account and treat that as being over. [01:01:08] Speaker 05: Everyone agrees this facility, which is spelled out in our affidavit in the diagram, right? [01:01:14] Speaker 05: It's physically impossible for it to produce as a facility more than 80 megawatts. [01:01:20] Speaker 05: No one argues that that power is being used for anything else but then the delivery of power to the grid. [01:01:24] Speaker 05: It's not being used by some [01:01:26] Speaker 05: bit mine or anything or anything else, it is only being used to deliver power to the grid. [01:01:31] Speaker 05: And everyone agrees that it's not 50 plus 81, 30, 24 hours a day, whatever, there's no period of time ever that it can be ever more than 80 megawatts. [01:01:42] Speaker 05: And megawatts is the amount of power can be delivered on demand in any particular time. [01:01:48] Speaker 05: When you measure megawatt hours, it's a whole different subject. [01:01:50] Speaker 05: Congress knows how to legislate regarding megawatt hours. [01:01:53] Speaker 05: It does that elsewhere in purpose and did not do so here. [01:01:57] Speaker 02: I'm not sure I caught your answer to the transmission capacity question. [01:02:02] Speaker 02: I have to confess that I didn't linger on it because we have cases about transmission capacity, like the lines that take power from one place to another. [01:02:15] Speaker 02: Is there, is that the distinction? [01:02:18] Speaker 05: No statutes are referencing the transmission of the power from one to the other. [01:02:23] Speaker 05: And there's power lost on the lines, et cetera. [01:02:26] Speaker 05: Here we're talking about the facility as a whole and how much it can produce. [01:02:30] Speaker 05: Um, and everyone agrees as a physical matter, this facility looking at it as a whole in all its sub components can produce only 80 megawatts. [01:02:40] Speaker 05: And, and as Mr. Fish said, [01:02:42] Speaker 05: The inverters here are a necessary component of this facility, produce any power at all to the grid, and regulations either consider it to be a part of the electrical generating equipment. [01:02:56] Speaker 05: It's part of the electrical generation, this use of the inverters, and the only thing that comes out of the inverters is a maximum of 80 megawatts net power that can be used in the grid. [01:03:06] Speaker 02: All right. [01:03:06] Speaker 02: If you have just a sentence to wrap up, we've been lenient with everyone. [01:03:10] Speaker 02: Why not you? [01:03:11] Speaker 02: And then we'll hear some remarks. [01:03:12] Speaker 05: I would just conclude by saying that North Western's argument isn't just to reject this solar facility, but really would harm all solar qualifying facilities, which all use larger solar arrays, and which would limit their capacity. [01:03:23] Speaker 05: If you have an 80 megawatt solar array, you'd be limiting the production really to 57 to 64 megawatts. [01:03:28] Speaker 05: So here, this is really attacked not just on our facility, but on all solar qualifying facilities. [01:03:34] Speaker 05: Thank you, Donna. [01:03:35] Speaker 02: Thank you. [01:03:36] Speaker 02: I think we have two council who have reserved two minutes for rebuttal and we'll start with Mr. Marwell. [01:03:49] Speaker 04: Thank you, Your Honor. [01:03:49] Speaker 04: I appreciate the rebuttal time. [01:03:51] Speaker 04: Just four quick points, if I could. [01:03:53] Speaker 04: First, I'd like to try to take another shot at responding to Judge Sintel's question about Chenery and the contents of the orders. [01:04:00] Speaker 04: I would just point you to JA 200, which is paragraph 23 of the March 2021 rehearing order. [01:04:06] Speaker 04: That's where FERC said, in reference to this phrase, power production capacity, nor do these terms have commonly understood meanings that taken together speak directly to this. [01:04:16] Speaker 04: the question, I think that's hard to reconcile with the position in their appellate brief, the capacity has this industry specific. [01:04:25] Speaker 02: I don't want to take your rebuttal time. [01:04:26] Speaker 02: I know you have three other points, but I guess there's a question about whether the word alone resolve something or whether the word in context with structure, whatever. [01:04:38] Speaker 02: But go ahead, you have three more points. [01:04:39] Speaker 04: Thank you. [01:04:40] Speaker 04: I agree. [01:04:41] Speaker 04: And certainly our textual argument, I think, reads the three words together. [01:04:44] Speaker 04: That's why we think they're [01:04:47] Speaker 04: On the solar star hypo of the very large solar facility, I was interested to learn that the commission's view on that, that that would somehow be disqualified. [01:04:59] Speaker 04: It seems to me that is a problem for them. [01:05:02] Speaker 04: The crux seemed to be that the behind the inverters or the on-site use would be for a useful purpose. [01:05:09] Speaker 04: And that's why they would add it and get over the 80. [01:05:12] Speaker 02: But that seems- I took their answer to be slightly more cabin that if, [01:05:16] Speaker 02: Broadview were upheld. [01:05:19] Speaker 02: Would that necessarily reach that? [01:05:21] Speaker 02: And I think it's a it's a separate question is what he was saying, but but I understand. [01:05:26] Speaker 02: Yes, you say so does one so does the other. [01:05:29] Speaker 04: I guess so. [01:05:29] Speaker 04: I guess they would need a principle basis, I suppose, in that future case, but I took the [01:05:36] Speaker 04: basis that they provided or the response to be well that's power for a useful purpose as distinguished from losses or resistance or whatever. [01:05:44] Speaker 04: But I think that the problem is that describes here the energy is being stored in the battery for a useful purpose. [01:05:51] Speaker 04: May I make the two other points very quickly? [01:05:54] Speaker 04: Thank you. [01:05:55] Speaker 04: Um, on the question of inverters as electric generation equipment, um, the way the commission described them in their orders here at J a one 91, actually this was consistent across all three orders was that inverters convert, uh, DC power to AC power. [01:06:10] Speaker 04: Um, and, uh, the J one nine one is one of the sites, but it's before. [01:06:17] Speaker 04: Thank you. [01:06:18] Speaker 04: Um, the last point is, [01:06:20] Speaker 04: With respect to your question, Judge Miller, about can you chart a course that doesn't rely on the capacity definition in the commission's pilot brief? [01:06:28] Speaker 04: I think if you look at pages 40 to 43 of their brief, it relies basically very exclusively on that definition. [01:06:35] Speaker 04: And if you are left with any doubt about what the commission itself would do, a remand will fix the Chenery issue and the commission may well, the commissioners may well agree with their very distinguished lawyers, but they may not. [01:06:46] Speaker 04: And that's the whole point of Chenery. [01:06:47] Speaker 04: And I think there's a lot new happening on appeal here. [01:06:50] Speaker 02: That was my thank you. [01:06:52] Speaker 04: Thank you. [01:06:53] Speaker 02: And now we have two minutes from Miss Curly. [01:06:59] Speaker 08: I will be very brief, your honors. [01:07:00] Speaker 08: I have a very limited issue. [01:07:01] Speaker 08: I think just responding to Mr Fish, who who noted that even if you know the facts are, you know, inequity may weigh and see his favor that there would be concerns about, you know, a broad reaching proclamation. [01:07:12] Speaker 08: I think I will just encourage this court that some of the issues for considered are the most pressing of our day. [01:07:17] Speaker 08: to require FERC to consider both timeliness and prejudice when FERC is considering policymaking and adjudicatory dockets is incredibly reasonable. [01:07:28] Speaker 08: It allows all voices to be heard, you know, where they need to be heard without disrupting the orderly conduct of business. [01:07:34] Speaker 08: We think the facts in this case are unique and unusual, and they present why the decision for intervention should not be limited to timeliness. [01:07:43] Speaker 08: because as I said earlier, for the agency to consider or hear the views of parties, they must be interveners in the proceeding. [01:07:52] Speaker 08: And so I have nothing more. [01:07:54] Speaker 08: It's a very limited issue. [01:07:57] Speaker 08: Thank you.