[00:00:00] Speaker 01:
Case number 23.1227 et al.

[00:00:04] Speaker 01:
Gage Range Solar LLC and Gage Range Solar II LLC petitioners for the Federal Energy Regulatory Commission.

[00:00:11] Speaker 01:
Mr. Faisi for the petitioners, Ms.

[00:00:13] Speaker 01:
Gale for the respondents, Mr. Vina for the intervener.

[00:00:17] Speaker 06:
Mr. Kesk, good morning.

[00:00:19] Speaker 08:
You may please the court.

[00:00:20] Speaker 08:
I'd like to reserve three minutes for rebuttal, please.

[00:00:23] Speaker 08:
A fundamental methodological flaw in Southwest's testing process inflated the costs Cage Ranch owed for interconnecting to the Southwest grid by hundreds of millions of dollars.

[00:00:35] Speaker 08:
Southwest assigns to new generators the costs for grid upgrades that would not be necessary but for those generators' connections.

[00:00:44] Speaker 04:
Can I ask you a question about standing council?

[00:00:46] Speaker 04:
Sure.

[00:00:48] Speaker 04:
So it seems to me that although your client was assessed $311 million in costs, it voluntarily withdrew from the interconnection process.

[00:00:58] Speaker 04:
So it was not financially injured by that assessment.

[00:01:03] Speaker 04:
And I guess my question is how that voluntary withdrawal from the interconnection process affects standing because

[00:01:12] Speaker 04:
Given that there's no economic harm because of the withdrawal, the only harm, it seems to me, is that your client lost its place in the queue.

[00:01:23] Speaker 04:
And if that's the harm, then we have both a causation and a redressability problem because the causation of losing your place in the queue was not the mistakes in the

[00:01:36] Speaker 04:
studies, it was the withdrawal of your client by failing to pay the deposit it needed to pay.

[00:01:43] Speaker 04:
And then there's also a redressability problem because fixing

[00:01:47] Speaker 04:
the problems in the interconnection study is not redressed by putting you back in the queue.

[00:01:55] Speaker 04:
The queue question relies on a different four-part test.

[00:01:59] Speaker 04:
So why does your client have standing to challenge the problems with the study?

[00:02:06] Speaker 08:
Sure your honor there's a lot in there so let me take it piece by piece now if I forget anything I'm sure you'll remind me but first of all we have standing we've been injured by this process we were kicked out of the queue it was not a voluntary withdrawal and it's a bit of terminology but we did not pay the fee

[00:02:24] Speaker 04:
That was not a voluntary choice.

[00:02:26] Speaker 08:
It was a voluntary choice not to pay it.

[00:02:28] Speaker 08:
But as part of this dispute resolution process, we filed a complaint.

[00:02:31] Speaker 08:
You saw the waiver of that process.

[00:02:32] Speaker 08:
So it was not a voluntary withdrawal in the sense that we did not want to be in the queue.

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We wanted to remain in the queue.

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We just wanted to pay the correct amount.

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So I think we're clearly injured by that process.

[00:02:44] Speaker 08:
These are very valuable.

[00:02:45] Speaker 04:
Sorry, you're injured by?

[00:02:46] Speaker 04:
I'm just trying to be more precise.

[00:02:48] Speaker 08:
By being removed from the queue.

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when we did not want to be removed from the queue.

[00:02:54] Speaker 04:
But if your argument hinges on being removed from the queue, it just seems to me that

[00:03:03] Speaker 04:
It's because you didn't pay the deposit.

[00:03:05] Speaker 04:
If you wanted to remain in the queue, you could have paid the deposit and remained in the queue.

[00:03:10] Speaker 04:
Isn't this a self-inflicted injury as opposed to one that was inflicted?

[00:03:14] Speaker 04:
I guess there's a finding by Furkin that the cause of the removal from the queue was not the process.

[00:03:22] Speaker 04:
It was your voluntary decision not to pay the deposit to stay in the queue.

[00:03:29] Speaker 08:
Your honor, I mean, just to be clear, we challenged the process.

[00:03:34] Speaker 08:
We said, you're asking us to post $60 million in at-risk security that we will lose if we later withdraw from this process based on a study process that is inherently flawed.

[00:03:45] Speaker 08:
At the same time, we asked the commission to essentially excuse the deposit requirement.

[00:03:54] Speaker 08:
If this court were to agree with us on those points, that's clearly redressable.

[00:03:57] Speaker 08:
The court would say,

[00:03:57] Speaker 04:
Okay, well, you can't rely on us ruling in your favor on the waiver issue in order to establish standing on the study issue because you have to prove standing for each claim independently, right?

[00:04:12] Speaker 04:
So just looking at your claim challenging the study, it seems to me

[00:04:18] Speaker 04:
that your voluntary withdrawal really changes the standing analysis.

[00:04:24] Speaker 04:
And if you had a problem with the rules, the way this works, it seems like you should have tried to amend the tariff or whatever the procedures are.

[00:04:35] Speaker 04:
But you took a gamble and said, we won't keep our place in the queue the way the rules require us to do it.

[00:04:42] Speaker 04:
And instead, we'll challenge and ask for a waiver.

[00:04:46] Speaker 04:
There's a risk in that because you might not get the waiver.

[00:04:48] Speaker 04:
It just seems to me that's a business decision.

[00:04:50] Speaker 08:
There was a risk on both ends, Your Honor.

[00:04:52] Speaker 08:
By not paying the deposit, we also, if we lose this case, we are now out of the queue.

[00:04:57] Speaker 08:
But there's lots of precedent in this court as well as with FERC.

[00:05:01] Speaker 08:
Let me start with the FERC precedent.

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FERC can restore queue positions.

[00:05:04] Speaker 08:
That's very clear.

[00:05:05] Speaker 04:
There's no question that they can.

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It's just you're not entitled to it.

[00:05:08] Speaker 04:
And so when you made the decision not to stay in the queue by paying your deposit, you were taking a risk.

[00:05:15] Speaker 08:
I don't know why you say we're not entitled to it on JA 351, note 45.

[00:05:17] Speaker 04:
You have to meet a four-part test in order to get back into the queue once you didn't pay your waiver.

[00:05:24] Speaker 04:
That's all I'm saying.

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And you are taking a gamble that you could meet the four-part test.

[00:05:29] Speaker 08:
Correct.

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We believe we do meet the four-part test.

[00:05:31] Speaker 08:
No, I understand that.

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But I also want to say that even putting aside waiver, Your Honor, FERC has equitable discretion to restore us to our queue position.

[00:05:37] Speaker 04:
I totally understand that.

[00:05:39] Speaker 04:
I totally understand that.

[00:05:39] Speaker 04:
But I'm just saying in terms of standing, you can't rely on

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telling us you're going to win on your waiver argument, that you can get that reversed in order to establish standing on your study challenge question.

[00:05:53] Speaker 04:
You have to establish standing independently.

[00:05:56] Speaker 08:
Your honor, even if we had not challenged the waiver finding itself, if we only challenged the methodological problem, if we were to prevail on that and the court were to vacate FERC's order and remand, FERC would still have discretion regardless of the waiver.

[00:06:08] Speaker 04:
I'm sorry?

[00:06:09] Speaker 04:
If you prevailed on your study,

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challenge.

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You're out of the process right now.

[00:06:17] Speaker 04:
Correct.

[00:06:18] Speaker 04:
So how does this redress your injury?

[00:06:20] Speaker 04:
You're trying to get back into the queue.

[00:06:22] Speaker 08:
Because we were injured by the removal from the queue.

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I'm just saying that that injury isn't related to the study problems that you've identified.

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You want to say there are all these mistakes in the study.

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And even if you're right, that doesn't get you back in the queue.

[00:06:41] Speaker 08:
I think they're bound up together, Your Honor.

[00:06:42] Speaker 08:
And in fact, that's the way FERC briefed it.

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That's the way Southwest briefed it.

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They essentially said, look at JA444.

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This is what FERC said below.

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Because Cage-Rantz has failed to show the phase two study defective, because of that, now I'm quoting,

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Thus, we thus continue to find that Cage-Range's argument that a concrete problem exists based on alleged effectiveness is unpersuasive.

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So it was bound up together.

[00:07:05] Speaker 04:
All four parts of that test were briefed.

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And so we can rely on any parts of it.

[00:07:09] Speaker 08:
Like, we're not- FERC only relied on one.

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And I think under APA principles, this court is bound.

[00:07:15] Speaker 04:
I'm just talking about standing here.

[00:07:16] Speaker 04:
And we have an independent duty to look at standing.

[00:07:19] Speaker 04:
And we don't have to rely on what FERC said.

[00:07:23] Speaker 04:
And I'm just trying to understand what you're

[00:07:26] Speaker 04:
what your injury is, which I think is being kicked out of the queue, and then how is

[00:07:32] Speaker 04:
If we find that you're correct about the study problems, how does that redress you being kicked out of the queue?

[00:07:37] Speaker 08:
Well, because in that situation, you would vacate the order below that FERC said that the study process was fine, remanded back to FERC, and then FERC would decide on the proper remedy.

[00:07:47] Speaker 08:
And I would say that if you look at page 351, note 45, we cite about half a dozen cases where FERC, in similar circumstances, restores parties to the queue after a study process has been proven to conflict with the Federal Power Act or with cost causation principles.

[00:08:01] Speaker 08:
I'd also point out that the tariff- They still have discretion, though?

[00:08:04] Speaker 08:
Yes.

[00:08:05] Speaker 08:
Yes, Your Honor.

[00:08:05] Speaker 08:
And in fact, even if we had not challenged the waiver of our Q position, they'd still would have discretion to do so.

[00:08:11] Speaker 08:
And the reason is because FERC has broad equitable discretion, number one, when there is a federal power act violation.

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But number two, the tariff itself, section 3.7, explicitly contemplates

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that a tariff customer who disputes withdraw and is removed can be resolved.

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And I'm quoting again, tariff 3.7.

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It says, once a customer is removed from the applicable queue, they are removed from the applicable queue position until such time that the outcome of dispute resolution would restore its position.

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So again, we have now engaged in that dispute resolution process.

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We've challenged the finding at FERC.

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Under the tariff itself, we are entitled to be restored to our Q position if we were to prove our Federal Power Act violation.

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So I'm happy to answer any other questions on that.

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But if not, I'd like to turn to the merits.

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And I think that the main issue, and I think the simplest and most straightforward way to resolve this case, is for the court to conclude that the Southwest simply did not test for but for causation.

[00:09:12] Speaker 08:
They looked at the grid at a particular snapshot in time with our proposed connection as part of that grid.

[00:09:17] Speaker 08:
But it was not a but for causation test, because they did not isolate the variable of our incremental impact.

[00:09:24] Speaker 08:
Instead, they added to the testing model two variables simultaneously.

[00:09:29] Speaker 08:
Number one, Cage Ranch's group addition.

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And number two, various contingencies.

[00:09:33] Speaker 08:
I didn't hear you.

[00:09:34] Speaker 08:
What's number one?

[00:09:35] Speaker 08:
Number one was the addition of our group, our cluster.

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And number two was various contingencies.

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And those are things like the catastrophic loss of the transmission line in order to evaluate the grid under stress.

[00:09:46] Speaker 08:
But that methodology simply cannot show under cost causation principles that Cage Ranch caused the need for the upgrades.

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Because for all Southwest knows, the same stress testing could have caused the grid model to fail even if Cage Ranch never connected.

[00:10:02] Speaker 08:
And in fact, I think if you look at page JA321,

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this is Southwest answer, they expressly admit, they say, we've never claimed that there were no non-convergences arising from contingencies in the pre-transfer case.

[00:10:16] Speaker 08:
They've come out and said it.

[00:10:17] Speaker 08:
So I don't think there's any dispute that they don't even take the position that there were potentially non-convergences.

[00:10:27] Speaker 08:
So FERC, before you, now says it was just irrelevant to test that.

[00:10:31] Speaker 08:
But we believe that under TANASCA, the best reading of that case is that the crucial but for question is whether the upgrades were already necessary before we connected.

[00:10:40] Speaker 04:
OK, so I'm not an expert in any of these issues.

[00:10:43] Speaker 04:
And it just seems to me that there was a finding that, or tell me if this is true or not, that Southwest just used

[00:10:52] Speaker 04:
the process and the analysis that they've always used, which is consistent with their tariff.

[00:10:59] Speaker 04:
And it seems to me that if you wanted to challenge the process that it always uses, you're supposed to try to get them to amend their tariff as opposed to coming in and just criticizing this process sort of in a single application.

[00:11:16] Speaker 08:
Well, Your Honor, we're not challenging the tariff.

[00:11:20] Speaker 08:
We don't think that

[00:11:22] Speaker 08:
the tariff requires them to test in this odd way.

[00:11:26] Speaker 08:
Again, this court requires under the cost causation principle that the upgrade costs that we're assigned are those that are necessary, that would not be necessary but for our interconnection.

[00:11:38] Speaker 08:
The tariff doesn't say anything about that, doesn't dispute that.

[00:11:41] Speaker 08:
I do agree that this would upset some of the internal manuals, some of the internal, well, not even upset, I'm just saying the internal manuals don't require

[00:11:48] Speaker 08:
Uh, contingency testing in the non trend in the, in the pre transfer case.

[00:11:53] Speaker 08:
Um, but, uh, they don't, they don't borrow it either.

[00:11:56] Speaker 04:
Um, there's a lot of discretion in the way some of these manuals are actually carrying that in all of their future interconnection studies, they need to do pre transfer testing.

[00:12:06] Speaker 08:
Your Honor, I mean, certainly if the argument is preserved, that's in a case like this.

[00:12:10] Speaker 04:
I just feel very uncomfortable telling FERC how to do pre-transfer, how to do interconnection studies.

[00:12:15] Speaker 08:
Well, Southwest, I mean, it's not unusual.

[00:12:17] Speaker 08:
I think there's evidence in the records undisputed that Mid-Continent or MISO does this exact testing.

[00:12:24] Speaker 08:
And again, I just want to focus on the exact reason why it's so important.

[00:12:27] Speaker 04:
But I think you're asking us to rule that they have to do this in every interconnection study, or else it will not comport with the cost

[00:12:35] Speaker 04:
Yeah, I'm asking you to tell them that in this situation, even that we're not experts in energy law, that just makes me uncomfortable.

[00:12:43] Speaker 08:
Well, I don't think this is a complicated question of energy law, at least the primary submission we're making today, Your Honor.

[00:12:49] Speaker 08:
We think it's more of a straightforward scientific or engineering or even a common sense proposition.

[00:12:54] Speaker 04:
We also aren't experts in engineering.

[00:12:56] Speaker 08:
Well, fair enough.

[00:12:57] Speaker 08:
But just say common sense.

[00:12:59] Speaker 08:
If we want to test for a variable, if we change two things, we don't know which of the two things.

[00:13:07] Speaker 08:
We need a control group.

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And then we add an experimental group.

[00:13:11] Speaker 08:
You want the control group to be identical in every respect, except for the one variable you're changing.

[00:13:15] Speaker 08:
In this situation, the one variable you're testing is, what is PageRanch causing to the grid?

[00:13:21] Speaker 08:
And that's not what they do.

[00:13:23] Speaker 08:
To be very clear, what they do is they start with a base case.

[00:13:26] Speaker 08:
The base case is derived from the regional transmission planning process.

[00:13:30] Speaker 08:
That's just looking at what happens in a particular time.

[00:13:32] Speaker 08:
Say 2021 was the base case for our cluster.

[00:13:36] Speaker 08:
What they did was they took that, and then they made various adjustments to it.

[00:13:39] Speaker 08:
Because according to Southwest, the grid is constantly changing.

[00:13:42] Speaker 08:
That's on Southwest Brief 23 and JA 323.

[00:13:45] Speaker 08:
They say they make a bunch of adjustments to.

[00:13:47] Speaker 04:
I thought the adjustments were just everybody who is ahead of you in the queue.

[00:13:50] Speaker 08:
They also do that.

[00:13:51] Speaker 08:
That's what I'm getting to.

[00:13:52] Speaker 08:
So they start with the regional transmission process, then they make adjustments.

[00:13:55] Speaker 08:
That's Southwest Brief 23 and JA 323.

[00:13:57] Speaker 08:
Then they add all the higher Q generators.

[00:14:02] Speaker 08:
Then they add us.

[00:14:04] Speaker 08:
Then they test for contingencies.

[00:14:05] Speaker 08:
Then they do things like say, well, what happens if we catastrophically lose a transmission line?

[00:14:09] Speaker 08:
What happens to the grid then?

[00:14:10] Speaker 08:
And then what happens in the middle of summer if we do that, in the middle of winter if we do that?

[00:14:14] Speaker 08:
That's where they run those tests.

[00:14:15] Speaker 08:
And then they say, oh, look, the grid failed.

[00:14:16] Speaker 08:
But they don't know.

[00:14:17] Speaker 08:
And they expressly admit they have no idea if that same problem would have occurred

[00:14:23] Speaker 04:
immediately before we were added, or in the base case, or even, I mean, we think- We're saying that the problem could arise in the pre-transfer scenario and not necessarily in the third scenario.

[00:14:34] Speaker 08:
Absolutely.

[00:14:34] Speaker 08:
We think it could arise in the pre-transfer scenario.

[00:14:36] Speaker 08:
We think it could arise in the base case.

[00:14:38] Speaker 08:
And we think there's evidence even in the regional transmission process.

[00:14:42] Speaker 08:
But I don't think you need to even reach that because I think the flaw is more fundamental.

[00:14:45] Speaker 08:
It's simply if you're going to test for but for causation, you actually have to test for but for causation.

[00:14:51] Speaker 08:
You can't just look at the grid at a particular snapshot in time, run a bunch of contingencies, and say, well, we're going to put all the costs on your client.

[00:15:00] Speaker 08:
I'm happy to answer additional questions on that point or any others, or I can save the balance of my time.

[00:15:07] Speaker 06:
What do you understand to be the relationship between the regulatory standard of but for causation and the statutory clause principle of cost causation?

[00:15:22] Speaker 06:
Are they the same?

[00:15:23] Speaker 06:
Are they different?

[00:15:25] Speaker 06:
I want to make sure I understand your question properly.

[00:15:26] Speaker 06:
But for cause versus

[00:15:30] Speaker 06:
cost causation.

[00:15:32] Speaker 08:
I think what this court has said is that they are the same.

[00:15:36] Speaker 08:
I'm sorry, not the same, but they're closely related.

[00:15:39] Speaker 08:
And essentially, cost causation requires at least a rough approximation of the costs that you're, in this context, the cost that your connection required.

[00:15:49] Speaker 08:
But it's not purely but for because it also requires looking at the benefits derived.

[00:15:53] Speaker 08:
I think that's the distinction the case law bears out.

[00:15:56] Speaker 08:
So there's both a burden and a benefit inquiry.

[00:16:01] Speaker 08:
But again, I think the key fact here is that you actually need to be able to test for that incremental impact of your generation.

[00:16:09] Speaker 08:
If this was a case where they had actually performed the proper testing and we were assigned some costs, we could not come in here and quibble about, well, it should have been a tiny bit higher, tiny bit lower.

[00:16:20] Speaker 08:
They just need to know.

[00:16:20] Speaker 08:
But here, they just don't know.

[00:16:22] Speaker 08:
Were those problems already in the grid before we were added?

[00:16:25] Speaker 08:
Or was it our addition?

[00:16:29] Speaker 08:
And perhaps it would have been if they performed the tests as Mid-Continent does, but they have not done so.

[00:16:34] Speaker 06:
I had thought, I don't know, I had thought cost causation was the more intuitively simple argument for you.

[00:16:44] Speaker 06:
You're pushing but for cause hard.

[00:16:49] Speaker 06:
I understand that, but I'm a little wary, like Judge Pan, of trying to tell the agency how to structure the studies.

[00:17:02] Speaker 06:
The cost causation just seems like there's this basic idea, even if you were the but-for cause of

[00:17:15] Speaker 06:
But for cause of a bunch of expenses, right?

[00:17:18] Speaker 06:
If the benefits are diffuse, they have to at least take a look at that allocating.

[00:17:26] Speaker 08:
I absolutely agree, Your Honor.

[00:17:27] Speaker 08:
And I think that's another way for the court to rule in our favor.

[00:17:31] Speaker 08:
They didn't look at the benefits at all.

[00:17:33] Speaker 08:
And I think it's especially striking here because, again, the regional transmission line along the eastern border of New Mexico that they assigned to us as part of the preliminary cost assignments, once that was actually added to the models later on in the process, it dramatically reduced the cost to a fraction of what they were before.

[00:17:52] Speaker 08:
So clearly, there were regional benefits to the cost that they were.

[00:17:55] Speaker 06:
voltage line, right?

[00:17:56] Speaker 08:
Correct.

[00:17:57] Speaker 08:
Which has regional benefits.

[00:17:58] Speaker 08:
Regional benefits, exactly.

[00:17:59] Speaker 08:
That's the old Dominion case.

[00:18:01] Speaker 08:
So yeah, so I certainly don't mean to push that we need a ruling on buck-four causation.

[00:18:05] Speaker 08:
I think you could look at it through, I think buck-four causation is just intuitive because that's really cause and fact.

[00:18:11] Speaker 08:
And they just don't know if we were the cause and fact.

[00:18:13] Speaker 08:
And in fact, they've absolutely admitted, again, JH 321, never claimed.

[00:18:17] Speaker 08:
that the non-convergences weren't already there.

[00:18:20] Speaker 08:
And I think the other striking quotation I'd urge you to look at is JA325, when Southwest, again in his answer, says, quote, the fact that a contingency causes non-convergence in the pre-transfer case does not mean upgrades cannot be assigned to mitigate constraints.

[00:18:35] Speaker 08:
So they say, even if there were non-convergences in the pre-transfer case, and we don't know whether there were or not, that doesn't mean we can't assign the cost to you.

[00:18:43] Speaker 08:
And again, that just seems very much a basic cost causation flaw.

[00:18:50] Speaker 06:
Thank you.

[00:19:00] Speaker 06:
Whenever you're ready.

[00:19:16] Speaker 03:
I want to start with Judge Pan's point about standing.

[00:19:21] Speaker 03:
I think that's an excellent point here.

[00:19:24] Speaker 03:
The supposed injury of losing their original Q position, that was caused, as you say, by their voluntary decision not to pay their study deposit.

[00:19:34] Speaker 03:
it's it's if anything self-inflicted.

[00:19:38] Speaker 03:
And the other point that Judge Pan raised on redressability, I also want to explore that because not only is this a voluntary business decision, but time has moved on since the original phase two study.

[00:19:53] Speaker 03:
of Cage Ranch's cluster.

[00:19:55] Speaker 03:
It's been years now.

[00:19:56] Speaker 03:
And from what I understand from Southwest, their cluster study is done.

[00:20:01] Speaker 03:
The other generators that chose to pay their deposits stay in the cluster.

[00:20:06] Speaker 03:
Their studies are completed.

[00:20:08] Speaker 03:
They've executed generator interconnection agreements.

[00:20:11] Speaker 03:
And they're in the process of building their network upgrades and the facilities needed to interconnect.

[00:20:19] Speaker 03:
In view of all that's changed with the passage of time, I guess I'm just really uncertain as to what could happen at this stage for Cage Ranch to obtain their desired relief of their original Q position.

[00:20:35] Speaker 04:
If they paid their deposit and were still in the study, could they still challenge the phase two study?

[00:20:43] Speaker 04:
Yes.

[00:20:44] Speaker 04:
That's what they should have done then.

[00:20:46] Speaker 04:
They should have paid their deposit and then brought this challenge.

[00:20:49] Speaker 04:
But if they succeeded, you still would have had to redo the study.

[00:20:53] Speaker 03:
That's correct.

[00:20:54] Speaker 03:
If they had succeeded, we still would have had to redo the study.

[00:20:58] Speaker 03:
But your point being that the more appropriate way to approach this would have been to pay the deposit.

[00:21:05] Speaker 03:
So you retain your Q position and you're continued to be processed along with the rest of the queue and retain your standing basically exactly challenge that study.

[00:21:13] Speaker 03:
Exactly.

[00:21:14] Speaker 03:
So that you continue to be studied along with the rest of the cluster.

[00:21:17] Speaker 03:
At that point, there's something that could be done about refunds if they happen to be correct on the cost allocation point, et cetera.

[00:21:24] Speaker 03:
But also, I do want to note that in this case, after they withdrew from the queue, a restudy was done after the board had approved the Crossroads Roadrunner Project in July 2022.

[00:21:36] Speaker 03:
And therefore, none of the generators that paid their deposits were assigned any costs associated with that project.

[00:21:45] Speaker 03:
So as to the improper cost causation challenges that Cage Ranch alleges, those costs were actually, after iterative interconnection study, not actually assigned to the generators in its cluster.

[00:22:03] Speaker 04:
Does that render anything moot?

[00:22:06] Speaker 04:
like or not because like that study is gone and passed you've moved on and it's a whole different set of costs.

[00:22:14] Speaker 04:
Is that mootness?

[00:22:16] Speaker 03:
I would think that there is some mootness implicated here because the actual costs that they dispute were improper were not actually assigned to any of the generators and the generator study is done in any case so I'm not entirely sure you know what sort of live challenge remains here but

[00:22:35] Speaker 03:
You know, as to standing, I don't, I believe Judge Pan is correct that there really are big questions here as to whether Cate Ranch has demonstrated there's still relief that's redressable for them.

[00:22:47] Speaker 06:
Why are we hearing about all this for the first time now?

[00:22:52] Speaker 03:
That's a great question.

[00:22:53] Speaker 06:
I will say personally, we have a duty to consider this, but it's a little hard to deal with all of this on the fly at oral argument.

[00:23:02] Speaker 03:
I take your point, your honor.

[00:23:04] Speaker 03:
I personally was not aware of how far the phase two study or the original cluster of cage ranch had progressed.

[00:23:15] Speaker 03:
And in preparing for this argument, learned that fact and agree with Judge Pan that

[00:23:22] Speaker 03:
with this new understanding of the circumstances, it does seem that standing is more tenuous.

[00:23:28] Speaker 06:
So one aspect of this is whether the injury was self-inflicted.

[00:23:35] Speaker 06:
That seems like it's a legal question that goes to standing, and we have to figure that out.

[00:23:44] Speaker 06:
Another one is

[00:23:49] Speaker 06:
weather change circumstances with new studies and such have affected our ability to give relief.

[00:24:01] Speaker 06:
So walk me through that.

[00:24:03] Speaker 06:
That might be a redressability point, but it might also be a mootness point.

[00:24:08] Speaker 06:
And it's your burden to show mootness.

[00:24:11] Speaker 06:
So just help me understand what

[00:24:17] Speaker 06:
where we are in terms of these studies?

[00:24:19] Speaker 03:
Sure.

[00:24:20] Speaker 03:
As to the voluntary decision point, the interconnection process is designed to act as a funnel.

[00:24:30] Speaker 03:
There are numerous requests that start out in the process.

[00:24:33] Speaker 03:
And as we go on with increasing study deposits and withdrawal penalties, those projects that are less certain make the business decision to withdraw their request.

[00:24:43] Speaker 03:
And again, they enter this cube knowing what the ex ante rules are, how these studies are conducted, when projects are entered into the model or not.

[00:24:53] Speaker 03:
And so if they're confronted with a cost allocation that is unfavorable or that they dislike, it's their voluntary decision whether or not to put up a deposit in order to continue the process in hopes of

[00:25:07] Speaker 03:
upon further iterative study, their cost allocations will change, or to do as Cage Ranch did here, which is withdraw.

[00:25:15] Speaker 03:
And even today, it remains free to resubmit a new request where it could have a different cost allocation.

[00:25:22] Speaker 03:
So that is, in my view, a self-inflicted injury of anything.

[00:25:28] Speaker 03:
But as to your point.

[00:25:29] Speaker 06:
Just on that, does it matter how excessive

[00:25:36] Speaker 06:
Bond is where the security is.

[00:25:38] Speaker 06:
The security we have to assume the merits of their position for standing purposes and the merits of their position is that.

[00:25:49] Speaker 06:
As I understand it is that the flaws in the study make the deposit wildly excessive.

[00:25:57] Speaker 03:
The security is 20% of their total assigned costs, but the system is designed that way.

[00:26:03] Speaker 03:
Given how severe the backlogs are in the interconnection queue, it's designed to pressure generators to make these business decisions earlier in the process.

[00:26:12] Speaker 03:
If they felt like the potential risk that a portion of their 60 million deposit being under risk was not worth

[00:26:23] Speaker 03:
the cost of their project, then that's an economic decision that they've made.

[00:26:27] Speaker 04:
Other generators- Is there a refund of the 60 million?

[00:26:30] Speaker 04:
Like the people who paid in here and then there was a restudy and it turns out the costs were lower.

[00:26:35] Speaker 04:
Did they get a refund of their deposit?

[00:26:37] Speaker 03:
So I believe Southwest can speak to that in more detail, but I do think there is some refund at issue here.

[00:26:47] Speaker 03:
So in tariff section 8.14, part G, that's at JA 529, it states that when a generator has made it to the end of the interconnection process and they execute an interconnection agreement,

[00:27:00] Speaker 03:
the financial security amounts they paid are put towards the upgrades that have been assigned to them and towards the construction of those upgrades.

[00:27:08] Speaker 03:
So any remaining funds that are left over will be refunded to that customer.

[00:27:14] Speaker 03:
So in this circumstance, if generators were initially assigned costs associated with an ITP project that is later approved and then added into the study at a later point in time, their financial security costs will be refunded to them in excess of what it

[00:27:30] Speaker 03:
actually cost to build their necessary upgrades.

[00:27:35] Speaker 05:
When the decision was made to withdraw or not to post the necessary deposit, had the plant been under construction at that point?

[00:27:48] Speaker 03:
When?

[00:27:50] Speaker 05:
Are they solar field, whatever it is?

[00:27:52] Speaker 03:
When K-Trans decided to withdraw, the board had at that point approved the Crossroads Roadrunner project.

[00:28:01] Speaker 03:
So it was at that point part of the regional transmission expansion plan.

[00:28:06] Speaker 03:
And because the interconnection study process is iterative, it would have been added into the next phase of study.

[00:28:14] Speaker 03:
And here, that was the October 2022 restudy.

[00:28:17] Speaker 05:
That gets to a great- The question is, in July, I think it was, it was true, right?

[00:28:26] Speaker 05:
Had they expended money on construction as of July?

[00:28:30] Speaker 05:
No.

[00:28:31] Speaker 05:
Okay.

[00:28:32] Speaker 05:
No.

[00:28:33] Speaker 05:
All right.

[00:28:33] Speaker 05:
So it's purely an ex-ante risk calculation.

[00:28:36] Speaker 03:
That's correct.

[00:28:37] Speaker 03:
Purely ex-ante risk calculation.

[00:28:40] Speaker 04:
But they had noticed that Crossroads Roadrunner

[00:28:44] Speaker 04:
I love that name.

[00:28:46] Speaker 04:
That Crossroads Roadrunner had been approved.

[00:28:49] Speaker 04:
So perhaps there would have been a refund on their $60 million.

[00:28:52] Speaker 03:
That's correct.

[00:28:54] Speaker 03:
I do want to also emphasize, along with that point, the interconnection process is iterative.

[00:28:59] Speaker 03:
So at the end of each phase, that's a cost estimate based on that point in time, what Southwest believes their upgrades will amount to.

[00:29:07] Speaker 03:
But it's continuously being changed.

[00:29:10] Speaker 03:
In between different study phases, this transmission grid, which is always in flux, new developments are occurring, those developments will be accounted for in the next phase of study.

[00:29:20] Speaker 03:
So even if

[00:29:21] Speaker 03:
you know, at the end of phase two, a generator is initially assigned costs associated with an upgrade that's contemplated in the integrated transmission process.

[00:29:33] Speaker 03:
As long as that upgrade is approved before the next phase of study begins, then that will be incorporated into the study model.

[00:29:39] Speaker 05:
And approval came in August?

[00:29:42] Speaker 03:
It came in July 2022.

[00:29:45] Speaker 05:
Same month in which they withdrew?

[00:29:48] Speaker 03:
Uh, they withdrew, I believe in August.

[00:29:50] Speaker 03:
So they withdrew after approval came.

[00:29:53] Speaker 04:
Oh, I think it was like August 15th.

[00:29:56] Speaker 04:
There's there is a, um, came out with the costs and then August 29th is when you finalize the classes.

[00:30:03] Speaker 03:
I believe that's correct.

[00:30:04] Speaker 03:
And there's a timeline in our, um, addendum to our brief on page three that lays out the dates of the key events.

[00:30:13] Speaker 06:
And the, uh, yeah, I'm sorry.

[00:30:16] Speaker 03:
Finished.

[00:30:17] Speaker 03:
No, that that was it.

[00:30:18] Speaker 06:
So suppose, just for the sake of arguments, because I think the injury is not self-inflicted and they've alleged problem with this pre-transfer study.

[00:30:37] Speaker 06:
Is this phase one, phase two?

[00:30:40] Speaker 02:
Phase two.

[00:30:41] Speaker 06:
Phase two pre-transfer study.

[00:30:47] Speaker 06:
What's happened in the interim that bears on redressability or moodness with these studies?

[00:30:59] Speaker 06:
What happened to that study?

[00:31:01] Speaker 06:
How has it been overtaken or not been overtaken by events?

[00:31:06] Speaker 06:
Just walk me through that.

[00:31:07] Speaker 03:
Right.

[00:31:07] Speaker 03:
On the redressability point, that's key to the relief that cage ranch requests is the restoration of their original Q position, but that's

[00:31:17] Speaker 03:
From my perspective, I'm not sure how that's possible at this point because, you know, after they withdrew, time has marched on and those studies continued.

[00:31:27] Speaker 03:
Phase two went into the restudy, then it went into phase three, and then the interconnection agreements with the remaining generators were finalized.

[00:31:35] Speaker 03:
So I'm not sure that their original Q position even exists anymore.

[00:31:40] Speaker 06:
So we've gone from phase two pre-transfer to we're all the way through

[00:31:46] Speaker 06:
phase three base pre-transfer transfer.

[00:31:50] Speaker 03:
Yes, we're all the way through all of those studies at this point.

[00:31:53] Speaker 03:
And the remaining generators that paid their deposits have executed interconnection agreements, which is the end of the interconnection study process.

[00:32:02] Speaker 03:
So those costs are finalized.

[00:32:03] Speaker 05:
If they were still in the queue, if we talked about restoring them to the queue, they would have come to the end of the process, found they had no liability for a deposit of 60, whatever, million dollars.

[00:32:17] Speaker 05:
No one else in the cluster had to pay as well, right?

[00:32:23] Speaker 05:
And so they would go on to an interconnection agreement, didn't they?

[00:32:27] Speaker 02:
That's correct.

[00:32:28] Speaker 05:
There would be no further obstacle.

[00:32:30] Speaker 05:
They would simply enter into an interconnection agreement and seek its approval.

[00:32:34] Speaker 03:
That's correct.

[00:32:34] Speaker 05:
So that's the redress.

[00:32:36] Speaker 03:
Well, that's if they had stayed in the queue and had continued to have their requests studied along with everyone else's.

[00:32:44] Speaker 03:
At this point, though, the cluster under study is a different cluster.

[00:32:49] Speaker 03:
And Cage Ranch's request has not been evaluated along with the other requests.

[00:32:55] Speaker 05:
Just stay with the cluster five.

[00:32:56] Speaker 05:
That group was, that evaluation has been completed.

[00:33:01] Speaker 05:
Yes.

[00:33:01] Speaker 05:
What reason is there to think that had there been another

[00:33:05] Speaker 05:
application in cluster five that it would have changed the outcome.

[00:33:10] Speaker 03:
because Cage Ranch's request has impacts on the transmission system.

[00:33:16] Speaker 03:
And there are upgrades that are triggered in response to the impact their request has.

[00:33:22] Speaker 03:
So when they withdrew from the queue, their request and their proposed generation facility was taken out of the study.

[00:33:29] Speaker 03:
So the impacts were no longer modeled.

[00:33:31] Speaker 03:
The costs that other generators in their cluster have been assigned have been in the absence of Cage Ranch's project.

[00:33:39] Speaker 05:
I have one.

[00:33:39] Speaker 05:
Thank you.

[00:33:41] Speaker 04:
So it just seems to me like on mootness, they are asserting that there have been all these errors in this phase two study.

[00:33:49] Speaker 04:
That study actually didn't even go into what has happened now because there was a restudy.

[00:33:55] Speaker 04:
and the process proceeded without them based on a re-study.

[00:33:59] Speaker 04:
And so if we were to hold that there were mistakes in that other study, there's nothing you can do about it.

[00:34:05] Speaker 04:
It just seems to be that it's moot because even if they're correct, it has no bearing on

[00:34:13] Speaker 04:
this entire process that has now proceeded because there was a restudy that went on without them.

[00:34:19] Speaker 04:
So there's nothing to correct because this whole new restudy happened.

[00:34:25] Speaker 04:
That actually addresses all of their concerns because it lowered the cost by considering Crossroads Roadrunner.

[00:34:33] Speaker 04:
Yes, that's correct.

[00:34:35] Speaker 04:
It just seems to me that there's also a mootness issue in terms of, you may be right that there were problems with this study, but it's a study that's been overtaken by events.

[00:34:42] Speaker 04:
It's been chucked and now there's a whole new restudy.

[00:34:46] Speaker 04:
And so correcting anything that was wrong with that first study does nothing at all.

[00:34:53] Speaker 05:
Is there any barrier to their simply petitioning again?

[00:34:56] Speaker 03:
to resubmitting a new request?

[00:34:59] Speaker 03:
No, there's no barrier.

[00:35:00] Speaker 03:
They can resubmit their new request.

[00:35:03] Speaker 03:
And given the current state of the grid, the cost of the crossroads roadrunner project wouldn't be allocated to them in any way.

[00:35:11] Speaker 05:
No telling what would come out of the next study.

[00:35:14] Speaker 03:
That's true.

[00:35:15] Speaker 03:
It's a new cluster.

[00:35:17] Speaker 03:
There's new costs and there's the time component because in that intervening time, the grid will continue to change as it always has.

[00:35:25] Speaker 03:
But I do want to, I know I'm over time, but I did want to try to address the merits if I could briefly.

[00:35:33] Speaker 03:
As to Cage-Ranche's argument that there are two variables changing, the reason why the contingency analysis is only done on the transfer case is because running one on the pre-transfer case would be duplicative.

[00:35:48] Speaker 03:
Aside from the current cluster under study, everything else is already studied under contingency through a separate process.

[00:35:57] Speaker 03:
So we think about the study model in three parts.

[00:36:00] Speaker 03:
There's the current cluster.

[00:36:02] Speaker 03:
Then there's the higher queued interconnection requests from prior clusters.

[00:36:06] Speaker 03:
And then there's the existing transmission system that Southwest studies annually through the integrated transmission process.

[00:36:14] Speaker 03:
two of those three components are already subject to a contingency analysis in their own separate process.

[00:36:22] Speaker 03:
And when Southwest puts together the study model for the current cluster, the network upgrades that are assigned as a result of those other contingency analyses are incorporated into the model.

[00:36:38] Speaker 03:
higher queued interconnection requests are assigned network upgrades in their own cluster study.

[00:36:44] Speaker 03:
And those assigned upgrades are put into the study model.

[00:36:47] Speaker 03:
Also, with the existing transmission grid under the integrated transmission planning process, the board approves projects.

[00:36:55] Speaker 04:
But then, like, is the addition of this cluster group compared to that pre-transfer group that includes the upgrades?

[00:37:04] Speaker 04:
Or is it compared to the base case that does not?

[00:37:07] Speaker 03:
It's compared to the pre-transfer case that has everything plus all the upgrades that have been assigned through the perspective contingency analysis.

[00:37:16] Speaker 04:
Then it sounds like there's just a factual error in their argument that you actually are comparing the third phase to the pre-transfer.

[00:37:23] Speaker 04:
phase?

[00:37:23] Speaker 03:
Yes.

[00:37:24] Speaker 03:
I think all of the parties in this appeal agree that the purpose of these interconnection studies is to isolate the effects of new generator interconnection requests.

[00:37:35] Speaker 03:
And that's essentially what Southwest Processes does.

[00:37:39] Speaker 03:
Even though it only does the contingency analysis on the transfer case, it's because it already does a contingency analysis on the other components of the model in their own separate processes.

[00:37:51] Speaker 04:
And then incorporates those.

[00:37:52] Speaker 03:
incorporate some results into the study model.

[00:37:54] Speaker 03:
And I want to point you specifically to, for example, the tariff at 3.8 JA509, which is also cited in our hearing order at paragraph 28 JA437.

[00:38:06] Speaker 03:
It says that before Southwest assigns upgrade costs to the current cluster, it will first mitigate study constraints with network upgrades that are part of the current transmission expansion plan.

[00:38:17] Speaker 03:
i.e.

[00:38:17] Speaker 03:
the upgrades that come out of the ITP process, and also network upgrades that are assigned to the prior queued interconnection requests from earlier clusters.

[00:38:30] Speaker 03:
And I also want to refer you to tariff section 8.4.1 on JA518, which similarly talks about that process of incorporating those network upgrades.

[00:38:46] Speaker 03:
As to the timing of the crossroads roadrunner approval, that project was not approved until July 2022.

[00:38:55] Speaker 03:
And it's necessary for this interconnection process to have these strict cutoffs and rules because the grid is constantly in flux, constantly changing.

[00:39:05] Speaker 03:
There has to be this line that we draw that says

[00:39:08] Speaker 03:
You know, no more changes added to the study.

[00:39:10] Speaker 03:
We have to stop at this moment in time and just run the study.

[00:39:14] Speaker 03:
And that's exactly what the rules work out to here.

[00:39:17] Speaker 03:
It's true that sometimes we'll see these edge cases where things will look a little more difficult.

[00:39:24] Speaker 03:
The overall process that's guaranteed by these rules are fair.

[00:39:28] Speaker 03:
They make sure that customers can proceed through their interconnection studies without holding these studies open for further changes.

[00:39:36] Speaker 03:
And it also respects the iterative nature of the interconnection process because changes that aren't incorporated into one phase can make it into later phases.

[00:39:46] Speaker 03:
With that, if there are no further questions, just regard.

[00:39:50] Speaker 06:
The but for inquiry as sufficient to satisfy cost causation.

[00:39:57] Speaker 06:
See, it seems to me, you've taken some, you, the agency taken some shifting positions on that over time.

[00:40:06] Speaker 03:
Yeah, so, yes, I believe the agency's position is that in the interconnection context, the commission uses, but for our cost causation to satisfy the cost.

[00:40:23] Speaker 03:
to satisfy cost causation principles.

[00:40:26] Speaker 03:
And that stems from order number 2003, which is also cited in our brief, where the commission determined that the cost causation principle requires interconnection customers to initially pay the full cost of the network upgrades that would not have been needed but for their interconnection request.

[00:40:44] Speaker 03:
and here that principle is satisfied because at the time that the phase two study began the crossroads roadrunner project had not been approved nor had any other project in that area and so this study model which is necessarily a snapshot in time under that model it was cage ranch's request that was the but for cause of its assigned upgrades regardless of what happened several months later after the study was already nearly complete

[00:41:13] Speaker 06:
Suppose the upgrade has to fuse.

[00:41:16] Speaker 06:
They are about for cause, but the upgrade has to fuse benefits for the grid.

[00:41:22] Speaker 06:
How do you account for the latter?

[00:41:25] Speaker 03:
So this is more of a policy decision from what I understand.

[00:41:29] Speaker 03:
I think it could be argued that for any interconnection upgrade, there is some diffuse benefit to that upgrade.

[00:41:35] Speaker 03:
But the commission, from what I understand, has decided that cost allocation in the interconnection context should work in the but for causation framework.

[00:41:45] Speaker 03:
Because the existing load on Southwest Grid, they've already paid for all of the facilities that exist on the grid.

[00:41:54] Speaker 03:
And new interconnection customers, they'll come in, and they won't have to pay for any of those facilities.

[00:41:58] Speaker 03:
So what the commission has decided respects the cost causation principle is to have new interconnection customers pay just those upgrades that are necessitated by their interconnection onto the grid.

[00:42:13] Speaker 04:
My understanding of Tanaska's read on this is that in this context where there is an interconnection request, basically,

[00:42:23] Speaker 04:
An operator like Kdranch says, let me join your grid.

[00:42:27] Speaker 04:
And the but for causation is the cost for you joining our grid is the cost of these upgrades that we have to make in order to have you.

[00:42:35] Speaker 04:
Because it's but for, that means that if you weren't asking to join our grid, we wouldn't be doing any of this stuff.

[00:42:42] Speaker 04:
And so the primary beneficiary of the upgrades is the requester, because absent the requester, there would be none of these upgrades.

[00:42:52] Speaker 04:
It's a but for thing.

[00:42:53] Speaker 04:
And so Tanaska seems to say that it's unlikely that there be diffused benefits that need to be allocated to other people in this particular factual

[00:43:04] Speaker 04:
context because the upgrades are because this operator has asked to join the grid and so they're the primary beneficiary.

[00:43:12] Speaker 03:
That's exactly correct.

[00:43:14] Speaker 03:
At the time that the study is done, the but for cause is the generator that is the primary beneficiary because these are upgrades that would not have been needed, but for their request, and they benefit by being able to interconnect reliably to the grid.

[00:43:30] Speaker 03:
And on that point, I just want to make a final note, which is the interconnection grid

[00:43:36] Speaker 03:
there can be concerns identified on the grid that Southwest monitors over years.

[00:43:42] Speaker 03:
But for cost causation, there needs to be a tipping point that's reached before an actual upgrade is needed.

[00:43:51] Speaker 03:
And whoever is responsible for reaching that tipping point is who pays for the upgrade.

[00:43:57] Speaker 03:
That's the system that the commission has adopted for the interconnection generator context.

[00:44:04] Speaker 03:
There are no further questions.

[00:44:05] Speaker 05:
Let me just point out that the company cites two cases, allegedly to the contrary, about system benefits.

[00:44:15] Speaker 05:
But neither of them is an interconnection case.

[00:44:17] Speaker 03:
That's correct.

[00:44:19] Speaker 03:
None of those cases are in the interconnection context, which the commission has decided to use a very different cost causation policy.

[00:44:31] Speaker 06:
Thank you.

[00:44:32] Speaker 07:
Thank you.

[00:44:54] Speaker 00:
Good morning.

[00:44:56] Speaker 00:
Thank you, Your Honor.

[00:44:56] Speaker 00:
May it please the court, Matt Bennett for Southwest Power Pool.

[00:44:59] Speaker 00:
I'd like to begin with this whole but for cost causation issue.

[00:45:03] Speaker 00:
There's a couple of things that I think need to be pointed out.

[00:45:05] Speaker 00:
One is but for is sort of a way to implement the cost causation principle.

[00:45:11] Speaker 00:
And what it does is it limits the responsibility of the generator to pay only for the upgrades that they are directly causing.

[00:45:19] Speaker 00:
So they don't pay anything for the existing grid.

[00:45:22] Speaker 00:
They don't pay anything for new upgrades that arise out of the integrated transmission plan, which is SPP's regional planning process.

[00:45:29] Speaker 00:
They only pay for those incremental upgrades that were identified by SPP as necessary to connect their generator to the grid.

[00:45:37] Speaker 00:
I'd also like to point out that the project that was actually assigned preliminarily to Cage Ranch is a different project serving different needs than the project that was approved through the regional planning process.

[00:45:49] Speaker 00:
So the way SPP looks at generator interconnection, we look at years two and five in the study.

[00:45:55] Speaker 00:
The integrated transmission process looks out 10 years.

[00:45:58] Speaker 00:
The reliability needs, if you look at the integrated transmission plan, which is in the record, the reliability need for the crossroads road runner project doesn't arise until 2031.

[00:46:07] Speaker 00:
The reliability need that is caused by the addition of the group five projects in the phase two study actually arises in 2026.

[00:46:17] Speaker 00:
The reason the project was approved

[00:46:19] Speaker 00:
as part of the 2021 ITP to be part of the SPB transmission plan in 2022 is because that particular project, the Crossroads Roadrunner project also provided additional economic benefits.

[00:46:33] Speaker 00:
So when we're looking at a project, we're looking at multiple things.

[00:46:36] Speaker 00:
Is it fixing a reliability problem?

[00:46:38] Speaker 00:
Can it provide economic benefits?

[00:46:40] Speaker 00:
Is there a public policy reason for including that project?

[00:46:43] Speaker 00:
This particular project was approved earlier than it probably would have been if we were just looking at reliability because it provided additional economic benefits.

[00:46:52] Speaker 00:
Those are not benefits that they are paying for.

[00:46:55] Speaker 00:
Those are not needs per se.

[00:46:59] Speaker 00:
They're called needs in the planning process, but it's really, does it provide a benefit?

[00:47:04] Speaker 00:
So the idea that these were the same projects is just not true because what we assigned to them was a more limited project to address a reliability need caused by their group during the 2026, I think it was summer.

[00:47:20] Speaker 00:
So it's two different projects.

[00:47:25] Speaker 06:
I'd next like to talk a little bit about the- Why does interconnection matter to justify

[00:47:34] Speaker 06:
very different approach to cost causation.

[00:47:37] Speaker 06:
If we were not in interconnection, right, and I'm not an expert either, but I have Old Dominion in mind, which I just remember.

[00:47:53] Speaker 06:
One utility in the grid wants to do this upgrade.

[00:47:58] Speaker 06:
It's a high voltage line.

[00:48:00] Speaker 06:
It has regional benefits and the costs would be allocated throughout the grid and passed on to generators or customers or whoever because high voltage lines have regional benefits.

[00:48:19] Speaker 06:
Why does that principle vanish in the interconnection context?

[00:48:25] Speaker 00:
Because FERC has asked us to only

[00:48:28] Speaker 00:
assess cost to generators that are caused by the needs that they create on the system.

[00:48:33] Speaker 00:
So yes, while as a general proposition, the 345 kilovolt line could have broad regional benefits, it doesn't mean it always does.

[00:48:42] Speaker 00:
If they're causing a problem.

[00:48:43] Speaker 00:
It might or might not.

[00:48:45] Speaker 06:
It might or might not.

[00:48:46] Speaker 06:
That's the cost causation question you would normally look at.

[00:48:50] Speaker 00:
But there's no evidence in the record that the project that was actually assigned to them, which was the Crossroads to Eddie project, has regional benefit.

[00:48:58] Speaker 00:
It was never assessed for a regional benefit.

[00:49:00] Speaker 00:
They didn't provide any evidence that provides regional benefit.

[00:49:03] Speaker 00:
It is put in place to address an immediate reliability need caused by their interconnection.

[00:49:08] Speaker 00:
It is not looked at.

[00:49:10] Speaker 00:
it was not looked at more broadly.

[00:49:12] Speaker 00:
What happened is events overtook that project and SPP determined that there was a different project, the Crossroads to Roadrunner project that we could justify for regional cost allocation on a basis that that project does provide diffuse benefits.

[00:49:26] Speaker 00:
It provides congestion relief.

[00:49:27] Speaker 00:
I'll put aside the later studies.

[00:49:30] Speaker 06:
I need to work that through in my own mind.

[00:49:34] Speaker 06:
But the reason why, the reason for the

[00:49:41] Speaker 06:
decision under review is FERC's legal position that but for causation suffices as a matter of law to establish cost causation.

[00:49:52] Speaker 00:
Right?

[00:49:54] Speaker 00:
For generator interconnections.

[00:49:57] Speaker 00:
Because when a generator seeks to interconnect to the grid,

[00:50:01] Speaker 00:
that's a voluntary choice on their part.

[00:50:03] Speaker 00:
Doesn't mean that the grid needed the power.

[00:50:05] Speaker 00:
Doesn't mean that that generator is the right generator to serve load.

[00:50:09] Speaker 00:
It just means that they want to connect to the grid and have an opportunity to participate in the market.

[00:50:13] Speaker 00:
So there's no guarantee that the upgrades that they are causing actually have regional benefit.

[00:50:18] Speaker 00:
Which is I think why FERC segments it into interconnection versus general regional transmission planning.

[00:50:23] Speaker 00:
Because we have to have an open door that anybody who wants to

[00:50:29] Speaker 00:
determine whether they can connect, we have to at least let them into the study, tell them what it's going to cost.

[00:50:35] Speaker 00:
And I think FERC has really drawn that bright line.

[00:50:37] Speaker 06:
I think another point to make is that these are all... It doesn't necessarily mean the upgrade will have regional benefits, but it doesn't necessarily mean that it won't.

[00:50:50] Speaker 00:
It doesn't, but there's no evidence in this record that that particular project does, because ultimately what was approved was a different project.

[00:50:57] Speaker 05:
I think you also say that they didn't they didn't claim regional benefits.

[00:51:02] Speaker 00:
They did not.

[00:51:02] Speaker 00:
They did not demonstrate regional benefits because they did they even purport to have them.

[00:51:09] Speaker 00:
I think they claimed in their brief, but I don't recall them claiming at FERC that this project provided broad regional benefits, and they certainly didn't put in any evidence.

[00:51:18] Speaker 06:
No, but FERC didn't say, as a factual matter, no regional benefits, therefore just assign all of the cost on a but-for basis.

[00:51:28] Speaker 06:
They said but-for cost is all that we care about.

[00:51:31] Speaker 00:
Well, I think it's also important to realize that when we talk about interconnection upgrades and but-for costs,

[00:51:37] Speaker 00:
They are fronting the costs, but they actually get paid back over time.

[00:51:42] Speaker 00:
That's a policy in order 2003.

[00:51:43] Speaker 00:
I think it's paragraph 694 to 696 of order 2003 that says, once they connect, we have to pay them back.

[00:51:52] Speaker 00:
So at the end of the day, they're not actually paying anything to interconnect.

[00:51:55] Speaker 00:
Sorry, we, Southwest?

[00:51:56] Speaker 00:
We, Southwest.

[00:51:57] Speaker 00:
The RTO?

[00:51:58] Speaker 00:
Yes.

[00:51:58] Speaker 00:
Okay.

[00:51:58] Speaker 05:
Is that just through their approved rates?

[00:52:03] Speaker 00:
So the way it works in an RTO context is we give them what's called congestion rights, long-term congestion rights, and then what happens is in the market, the SPP market sets a price for congestion, which is basically the difference in cost to transmit power from point A to point B.

[00:52:19] Speaker 00:
And for the upgrades that they provide to the system, we have to provide them an opportunity to get that revenue.

[00:52:26] Speaker 00:
And that's a long-term congestion, right?

[00:52:29] Speaker 00:
And that's a requirement.

[00:52:30] Speaker 00:
Like I said, it goes back to order 2003.

[00:52:32] Speaker 05:
So it's a rate.

[00:52:33] Speaker 05:
It's in the rates that they, in the tariff that they file.

[00:52:38] Speaker 05:
I'm sorry?

[00:52:38] Speaker 05:
It's in the rates that they seek.

[00:52:42] Speaker 00:
They being SPP or they being, yes, yes.

[00:52:45] Speaker 05:
Yeah, SPP.

[00:52:46] Speaker 05:
Coral Ranch.

[00:52:48] Speaker 00:
Yeah, it's in the SPP tariff that we will give them long-term congestion rights to reimburse them for fronting the cost of these upgrades.

[00:52:57] Speaker 00:
So when you look at it in the totality, generators ultimately end up not paying to connect to the grid because they're only fronting the costs because these are costs that other members of the RTO didn't necessarily want to incur.

[00:53:14] Speaker 00:
Because if these were costs that were seen as beneficial to everybody, they would have been included in the regional plan.

[00:53:20] Speaker 00:
So that's really kind of where I come out on the cost causation, but for principle is ultimately the load is going to end up paying for everything.

[00:53:28] Speaker 00:
It's just the timing of when the money comes in.

[00:53:30] Speaker 00:
And if I could just quickly, I'm sorry.

[00:53:33] Speaker 04:
Factually on this point, because as I was looking at this record, I was a little bit confused about it.

[00:53:38] Speaker 04:
But it seemed to me that if there had been an argument that the benefits of the crossroads road runner

[00:53:47] Speaker 04:
petition were actually being assessed in the but for causation thing, then they would have something.

[00:53:53] Speaker 04:
Because if you were going to do that anyway, or if the system needed the Crossroads Roadrunner thing, assume it wasn't an economic thing, but a reliability thing, then they would have a claim that they were being unfairly assessed something with broad regional benefits or whatever.

[00:54:11] Speaker 04:
But it seems factually that's not the case.

[00:54:15] Speaker 04:
And instead, what they were being assessed was this Crossroads Eddie thing, which didn't benefit anybody but them.

[00:54:24] Speaker 04:
So factually, there is no diffuse benefits to what they were being charged, even though theoretically, they could have had a claim if Crossroads Roadrunner were being assessed to them when it turns out Crossroads Roadrunner appears benefits everybody.

[00:54:39] Speaker 00:
I think that's potentially true.

[00:54:41] Speaker 00:
My only reason for quibbling with that is when did the need for the Crossroads Roadrunner Project come in?

[00:54:46] Speaker 00:
And if you're just looking at it from a reliability perspective, we don't need that project until 2031.

[00:54:52] Speaker 00:
So if they want to connect to the grid, their requested commercial operation date was December of 2023.

[00:54:58] Speaker 04:
But does diffuse benefits depend on that?

[00:55:00] Speaker 04:
on the timing because it turns out that if you were going to do it anyway, it was going to benefit a lot of people.

[00:55:06] Speaker 00:
Well, it does depend because by 2031, the grid may look entirely different and we may no longer have that reliability need.

[00:55:13] Speaker 00:
That's why we do these studies every year and that's why we do these studies sequentially.

[00:55:17] Speaker 00:
So there's a possibility that by the time that project was needed for reliability, it's no longer needed for reliability.

[00:55:23] Speaker 00:
But I will say in this situation, there was also the economic benefit, which is what justified it being improved earlier.

[00:55:28] Speaker 00:
And in that situation, I would agree.

[00:55:30] Speaker 00:
If we were to say you have to pay for Crossroads Roadrunner,

[00:55:35] Speaker 00:
we would be actually violating our tariff because once a project is approved in the regional plan, we remove it from the interconnection process.

[00:55:44] Speaker 00:
When I say we remove it, what I mean is.

[00:55:46] Speaker 04:
But what if you know you're going to approve Crossroads Road Runner?

[00:55:50] Speaker 04:
But at the moment in time in which you're issuing phase two interconnection study, it hasn't been approved yet.

[00:55:54] Speaker 04:
Do you take that into account?

[00:55:56] Speaker 04:
Or are you supposed to?

[00:55:57] Speaker 00:
No, no, we don't take it into account until it's actually approved by the board of directors.

[00:56:02] Speaker 04:
And that does get to everybody participating knows that it's possibly going to be approved.

[00:56:06] Speaker 04:
So everybody knows that that's a possibility.

[00:56:08] Speaker 00:
Well, everyone knows it's being considered.

[00:56:10] Speaker 00:
If you look at the joint appendix, there was actually a dispute as to whether this project had the needs that SPP had indicated that it had.

[00:56:21] Speaker 00:
I believe it's I don't have the site in front of me.

[00:56:26] Speaker 00:
Yes, it's a JA 174 foot no five where it basically notes that there are members of the transmission working group, which is one of the underlying stakeholder groups that disputed whether this project was needed.

[00:56:38] Speaker 00:
So while yes, it was Roadrunner Crossroads.

[00:56:41] Speaker 00:
That was Crossroads Phantom, which is a whole other project.

[00:56:44] Speaker 00:
That's where we kind of get

[00:56:45] Speaker 00:
Yeah, you kind of have to draw a flow chart to figure all this out.

[00:56:48] Speaker 00:
I understand.

[00:56:48] Speaker 00:
But that was Crossroads Phantom, which was sort of the predecessor, if you will, to what ended up being Crossroads Roadrunner, which is a different project then again from Crossroads Phantom.

[00:57:00] Speaker 00:
But the tariff is also designed to protect generators from additional costs because once a project is part of SPP's regional plan, they no longer pay for it.

[00:57:09] Speaker 00:
It's factored into their studies.

[00:57:11] Speaker 00:
And that's what happened here, as Ms.

[00:57:12] Speaker 00:
Gao pointed out, is when we did the restudy on phase two, which we had to do because among other generators, cage range dropped out, we had to do a restudy when people drop out of the queue because that's going to change the dynamics of everything.

[00:57:26] Speaker 00:
That's going to change

[00:57:27] Speaker 00:
their demand on the system that's going to change power flows and everything, that project effectively relieved some of the issues that were being caused by that group.

[00:57:37] Speaker 00:
So by withdrawing from the process prematurely, they did not benefit from having that project from which they would benefit but would not pay to be considered as part of the cost that they are assessed.

[00:57:55] Speaker 00:
If I could, I know I'm well over time, but I just want to talk just briefly on the redressability issue.

[00:58:02] Speaker 00:
The 2017 cluster is done.

[00:58:05] Speaker 00:
Studies are done.

[00:58:06] Speaker 00:
Interconnection agreements are signed.

[00:58:08] Speaker 00:
People are building.

[00:58:09] Speaker 00:
Transmission orders are building upgrades.

[00:58:11] Speaker 00:
I don't see how it's possible to reinsert them into that.

[00:58:15] Speaker 00:
Not only that, 2018, 2019, 2020 and 2021 are done.

[00:58:21] Speaker 00:
2022 and 2023 are past phase two, which is the phase where they dropped out.

[00:58:28] Speaker 00:
So I don't see how you can possibly redress their grievance by restoring a Q position that just simply does not exist.

[00:58:34] Speaker 04:
There's no Q anymore.

[00:58:35] Speaker 04:
There's no Q. Right.

[00:58:38] Speaker 04:
So I guess it's a question for your friend on the other side, but I hope that they try to get into a cluster group in the meantime.

[00:58:45] Speaker 04:
It didn't wait for this whole process to play out before doing that.

[00:58:51] Speaker 04:
Do you know whether they've tried to get into another cluster group?

[00:58:54] Speaker 00:
I don't know if they've tried to.

[00:58:55] Speaker 00:
Typically,

[00:58:57] Speaker 00:
Until studies are done, SPP treats who's going into the study confidentially is for business reasons to protect the generator.

[00:59:03] Speaker 00:
So I don't know if they've tried.

[00:59:05] Speaker 00:
I know that their next opportunity will be to enter in 2026 to be studied.

[00:59:11] Speaker 00:
And the grid is obviously very different than it was in 2017 when they first entered their request.

[00:59:19] Speaker 07:
Thank you.

[00:59:20] Speaker 00:
Thank you.

[00:59:29] Speaker 08:
Thank you, your honor.

[00:59:30] Speaker 08:
I'll try to make a few brief points.

[00:59:33] Speaker 08:
I'll begin with standing.

[00:59:34] Speaker 08:
I think I understand this court has to assure itself of its own jurisdiction, of course, but I do think it's telling that FERC has never raised any of these arguments until oral argument.

[00:59:42] Speaker 08:
Obviously, that puts us in a position where we are trying to do this on the fly.

[00:59:47] Speaker 08:
If you look at page 23 of our brief,

[00:59:49] Speaker 08:
We asserted very clearly that we have clear harms from having to pay $60 million in at-risk security that we would forfeit if they didn't fix the study in which we had identified very clear problems.

[01:00:01] Speaker 08:
And those harms would be redressed by a favorable ruling from this court, which would restore Cage Ranch to its Q position.

[01:00:07] Speaker 08:
FERC did not dispute that.

[01:00:08] Speaker 04:
There's no Q anymore.

[01:00:09] Speaker 08:
There is still a queue, Your Honor.

[01:00:11] Speaker 08:
The study process has been complete, but the queue can be reopened at any time.

[01:00:15] Speaker 08:
In fact, in the Tanaska case, that is exactly what happened.

[01:00:18] Speaker 08:
The study process had been completed, and construction was actually already underway.

[01:00:25] Speaker 08:
A generation interconnection agreement by Tanaska had already been signed.

[01:00:28] Speaker 08:
The queue was reopened, a restudy occurred, and they were assigned additional costs.

[01:00:32] Speaker 08:
That's why they came to court.

[01:00:33] Speaker 08:
So it's not the case that this is unreviewable.

[01:00:35] Speaker 04:
And again- Has your client tried to enter other clusters

[01:00:37] Speaker 04:
in the meantime?

[01:00:38] Speaker 08:
It has not, because it doesn't need to, Your Honor.

[01:00:39] Speaker 08:
It should be in this cluster.

[01:00:40] Speaker 08:
This was the cluster it should have been in until it was kicked out by being... But what if you lose?

[01:00:46] Speaker 08:
then it's lost its opportunity.

[01:00:47] Speaker 08:
But that was the risk it was willing to take.

[01:00:49] Speaker 08:
And I think that goes to the risk point you were talking about earlier, where it's a meaningful step in the process.

[01:00:58] Speaker 08:
And that's why we were injured.

[01:00:59] Speaker 08:
We were being asked to pay $60 million that made the project uneconomical at that time.

[01:01:05] Speaker 08:
And so we took a risk.

[01:01:06] Speaker 08:
We said, we're either going to win this case and we get back to our queue.

[01:01:09] Speaker 04:
But you recoup your $60 million.

[01:01:11] Speaker 08:
Well, the big South has said that multiple times.

[01:01:13] Speaker 08:
They don't cite anything in the brief for that.

[01:01:15] Speaker 08:
I've talked to my colleagues and we don't.

[01:01:17] Speaker 08:
That's not the case as far as I understand it.

[01:01:20] Speaker 08:
We don't believe we get reimbursed those costs.

[01:01:22] Speaker 08:
So I'm not really even sure what they're referring to.

[01:01:24] Speaker 08:
I'm not sure how you would resolve that on this record considering they don't cite anything for that proposition.

[01:01:29] Speaker 08:
So I don't actually think that's the case.

[01:01:30] Speaker 08:
This is money.

[01:01:31] Speaker 08:
Sixty million dollars that made the project uneconomical for us.

[01:01:34] Speaker 05:
The decision refers to it more than once as reimbursable.

[01:01:38] Speaker 08:
It refers to that, Your Honor.

[01:01:39] Speaker 08:
But again, it hasn't really been briefed in this case.

[01:01:43] Speaker 08:
I'm not really even sure what that refers to.

[01:01:45] Speaker 08:
So they say maybe reimbursable through rates over time.

[01:01:49] Speaker 05:
I think that's at the very least what it means.

[01:01:51] Speaker 08:
Right.

[01:01:52] Speaker 08:
But I don't know if that is some formal process or simply we get paid back by our normal rate-making process.

[01:01:59] Speaker 08:
But again, it's a different use of reimbursable, I would think, considering we're being asked to pay $60 million.

[01:02:05] Speaker 04:
I guess there's a real reason for that $60 million.

[01:02:08] Speaker 04:
It's a lot of money, but it seems, just as I sit here listening to the arguments today, that it's important for FERC or Southwest to understand who's in and who's out because all the decisions are made based on who's in and who's out.

[01:02:23] Speaker 04:
Then they decide what upgrades they need.

[01:02:26] Speaker 04:
Then they decide how to allocate the different costs of these upgrades.

[01:02:29] Speaker 04:
and all of these things.

[01:02:30] Speaker 04:
So it seems that a company in the position of your client needs to pay their 60 million, stay in, keep your appeal of the study intact.

[01:02:42] Speaker 04:
And then if you win, at least you're in and all the subsequent stuff accounts for your draw on the grid.

[01:02:48] Speaker 04:
But then it's just a question of money and figuring out what they owe you.

[01:02:52] Speaker 04:
So it just seems like an untenable process that you're proposing, which is that you can just refuse to

[01:02:58] Speaker 04:
to be in, don't pay your deposit and then come in later when it's just really difficult to get you back in.

[01:03:07] Speaker 04:
But if you had stayed in, you would have either gotten a refund or turned out to work out for you in the restudy or we could be at this point, you could have entered a contract and be building your thing and you'd get some kind of a refund.

[01:03:23] Speaker 04:
But now it's just,

[01:03:25] Speaker 04:
really hard.

[01:03:26] Speaker 08:
Well, Your Honor, or we would be, I think there's a third possibility you're not considering, which is that we would be saddled with paying $60 million in an uneconomical project for us.

[01:03:34] Speaker 04:
No, but your $60 million always gets credited to what you pay later.

[01:03:39] Speaker 08:
Well, if we were asked to pay $300 million, but we owed a tiny fraction.

[01:03:43] Speaker 04:
No, no, no.

[01:03:44] Speaker 04:
But if it turns out at the end of this process, you're asked to pay $20 million, you would get a refund of $40 million.

[01:03:49] Speaker 08:
But if the process had completed, and they said, actually, you're 100 million, then we would have had to pay even more for an economic goal.

[01:03:55] Speaker 04:
That's just part of being part of this process, which sounds like it's very dynamic.

[01:03:59] Speaker 08:
But it sounds like we can't really then meaningfully challenge legal errors if we're being asked to put at-risk security that is forfeitable completely.

[01:04:08] Speaker 04:
it just seems that there's a real reason for that because they need to know who's in in order to do all this planning and it's not just you there's like all these other people in the cluster so it's for you to say well i'm not going to pay my deposit and now

[01:04:24] Speaker 04:
late in the game, I should be able to come back into the queue, scramble this whole process, put everybody back to phase two when they've completed the process, just because you didn't want to pay your 60 million.

[01:04:34] Speaker 08:
Well, rather than speaking hypotheticals, it's not an appropriate way to proceed.

[01:04:36] Speaker 08:
Rather than speaking hypotheticals, Your Honor, I'll point you to J 351.

[01:04:40] Speaker 08:
We say half a dozen cases there.

[01:04:43] Speaker 08:
For example, Florida municipal power agency.

[01:04:47] Speaker 08:
Acknowledging that reinstatement of Q position and reordering of Q appropriate remedy for remedying unjust practices.

[01:04:55] Speaker 08:
We say Edison mission energy.

[01:04:56] Speaker 08:
We grant Edison missions complaint and direct MISO to reinstate the Q position.

[01:05:00] Speaker 08:
The list goes on.

[01:05:03] Speaker 08:
I take the points you're making hypothetically, but the fact is FERC does this all the time.

[01:05:08] Speaker 08:
This is not an uncommon situation.

[01:05:11] Speaker 08:
And in fact, we said in our opening brief on page 23, these harms are redressable.

[01:05:15] Speaker 08:
They can restore the Q position.

[01:05:17] Speaker 08:
FERC did not contest that.

[01:05:19] Speaker 04:
So it seems to me that they could move mountains to accommodate what you're asking for.

[01:05:24] Speaker 04:
But I don't know why they should have to when you could have just paid your deposit.

[01:05:28] Speaker 08:
Well, that's just the way that FERC practice works, Your Honor.

[01:05:31] Speaker 08:
It's the way the tariff itself contemplates.

[01:05:33] Speaker 08:
It says, if you've been withdrawn from the queue, that's section 3.7.

[01:05:35] Speaker 04:
But if you know that this is how FERC practice works, you know that you're taking a risk by not paying your deposit.

[01:05:40] Speaker 04:
Because letting you back in the queue is ultimately discretionary and based on four factors, which you already conceded.

[01:05:46] Speaker 04:
So you might fail on the four factors.

[01:05:48] Speaker 08:
No, I don't think so, Your Honor, because the tariff itself contemplates restoration.

[01:05:52] Speaker 08:
There's nothing to do with those factors.

[01:05:53] Speaker 08:
That's tariff section 3.7.

[01:05:54] Speaker 04:
It's still discretionary.

[01:05:54] Speaker 04:
You don't have to be restored to the queue, right?

[01:05:58] Speaker 08:
There's two separate issues.

[01:05:59] Speaker 08:
One is whether we should have gotten a waiver and a second is whether this court has remedial authority by through making the orders.

[01:06:06] Speaker 08:
But again, rather than speaking hypotheticals, I urge you to look at those cases.

[01:06:09] Speaker 08:
I would also suggest, Your Honor, especially given that mootness is their burden, at a bare minimum, if we're going to resolve the case on this ground, which was not raised by them at any point,

[01:06:17] Speaker 08:
the court should ask for supplemental briefing or even now I'm having offered if you'd like to see something on this.

[01:06:23] Speaker 08:
I just think that would be an unjust way to end this case considering they had ample opportunity to say there was no remedial authority and didn't do so.

[01:06:30] Speaker 08:
Another quick point I just wanted to push back on first point that somehow these had already been studied.

[01:06:37] Speaker 08:
They do not use the transfer case from the 001 cluster to test the 002 cluster.

[01:06:42] Speaker 08:
We know that because they use different studies.

[01:06:45] Speaker 08:
Page eight of our reply brief, we point out that they start with a different baseline model, 2021 model for our cluster, 2019 for the prior cluster.

[01:06:54] Speaker 08:
So there's just no basis to say that the testing has been complete.

[01:06:58] Speaker 08:
And finally, on the system-wide benefits point, Your Honor, I do think that's a critical point.

[01:07:04] Speaker 08:
These are high-voltage lines that have system-wide benefits.

[01:07:07] Speaker 08:
If you look at page 14 of our brief, we have a map.

[01:07:12] Speaker 08:
And if you look closely, you kind of need a magnifying glass, but if you look closely, you can see

[01:07:16] Speaker 08:
The different grid, the areas where this transmission line is going to be built is all of the projects we've been referring to today, the Crossroads Eddy project, the Crossroads Phantom project, the Crossroads Roadrunner project.

[01:07:30] Speaker 08:
They're all obviously involving crossroads, right?

[01:07:33] Speaker 08:
It's all the same area of the grid, but just different.

[01:07:36] Speaker 08:
The transmission process is trying to figure out where exactly are we going to put that.

[01:07:39] Speaker 08:
Are we going to connect three lines?

[01:07:40] Speaker 08:
Are we going to connect this way, this way, or this way and this way?

[01:07:44] Speaker 08:
So it's true that at that time of the transmission process in February, they had not approved the specific project they ultimately approved.

[01:07:51] Speaker 08:
But what they had said was that it was a multi-faceted problem in that region.

[01:07:57] Speaker 08:
That's JA-218, JA-235.

[01:07:59] Speaker 08:
The area experiences thermal overloads and insufficient voltage support leading to voltage collapse.

[01:08:04] Speaker 08:
So this, I think, goes exactly to, Judge Katz, your points, that if you were going to have a rule that says cost causation is

[01:08:14] Speaker 08:
but for causation only, then you really do need to test but for causation.

[01:08:17] Speaker 08:
You cannot then assign costs based on grid problems that pre-existed our connection.

[01:08:23] Speaker 08:
If you're going to take a broader view of cost causation instead incorporates both but for causation as well as benefits, well, then maybe you have a little more flexibility there.

[01:08:31] Speaker 08:
And I think, again, I think old dominion is critical on that point because that shows that these were really regional costs and problems that should be fixed regionally.

[01:08:42] Speaker 08:
Thank you.

[01:08:44] Speaker 06:
Okay, thank you very much.

[01:08:45] Speaker 06:
Thank you.

[01:08:46] Speaker 06:
Case is submitted.