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Southwestern Power Admin. v. Federal Energy Regulatory Comm.

United States Court of Appeals, District of Columbia Circuit

August 22, 2014

SOUTHWESTERN POWER ADMINISTRATION, ET AL., PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT, MID-WEST ELECTRIC CONSUMERS ASSOCIATION, INC., ET AL., INTERVENORS

Argued May 9, 2014

On Petition for Review of an Order of the Federal Energy Regulatory Commission.

Henry C. Whitaker, Attorney, U.S. Department of Justice, argued the cause for petitioners. With him on the briefs were Stuart F. Delery, Acting Assistant Attorney General, Ronald C. Machen Jr., U.S. Attorney, and Michael S. Raab, Attorney.

Sherry Quirk, David Fitzgerald, Jeffrey C. Genzer, and Kristen Connolly McCullough were on the brief for intervenors Mid-West Electric Consumers Association, et al. in support of petitioners. Monica M. Berry entered an appearance.

Lona T. Perry, Senior Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With her on the brief were David L. Morenoff, Acting General Counsel, and Robert H. Solomon, Solicitor.

Rebecca J. Michael and Sonia C. Mendonç a were on the brief for intervenor North American Electric Reliability Corporation in support of respondent. Meredith M. Jolivert entered an appearance.

Before: GARLAND, Chief Judge, and SRINIVASAN and PILLARD, Circuit Judges. OPINION filed by Circuit Judge SRINIVASAN.

OPINION

Page 28

Srinivasan, Circuit Judge

Section 215(b)(1) of the Federal Power Act grants the Federal Energy Regulatory Commission jurisdiction over " all users, owners and operators of the bulk-power system . . . for purposes of approving reliability standards . . . and enforcing compliance." The terms of that provision specify that the group of " users, owners and operators" generally subjected to the Commission's jurisdiction " include[s]" the United States. A different provision, section 215(e) of the Federal Power Act, authorizes the Commission and its designee the North American Electric Reliability Corporation to impose monetary penalties on " a user or owner or operator of the bulk-power system" for violations of reliability

Page 29

standards. That provision contains no separate specification that " a user or owner or operator" subject to the imposition of monetary penalties includes the United States.

The Corporation, asserting its power under section 215(e)(1), assessed a monetary fine against the Southwestern Power Administration, a federal government entity that markets hydroelectric power. Southwestern, along with the Department of Energy and the Department of the Interior, appealed the penalty to the Commission. They argued that the relevant provisions of the Federal Power Act effect no unequivocal waiver of the United States's sovereign immunity from monetary penalties, as would be necessary to sustain the fine. The Commission upheld the penalty. It reasoned that section 215(b)(1) and section 215(e) work in tandem to establish an unambiguous waiver of sovereign immunity with regard to monetary penalties.

We disagree. Section 215(b)(1) generally subjects federal government entities to the Commission's jurisdiction to enforce compliance. But to authorize a monetary award against the federal government, the statute must do more than generally bring the government within the Commission's enforcement jurisdiction--it must unequivocally subject the government to monetary liability. Neither section 215(b) nor section 215(e), nor the two considered in combination, speaks with the requisite clarity to waive the federal government's sovereign immunity from monetary penalties. We therefore vacate the Commission's order.

I.

Section 215 of the Federal Power Act requires the development and enforcement of mandatory reliability standards for the bulk-power system. See 16 U.S.C. § 824o. The bulk-power system is the interconnected transmission network that makes up the nation's electrical power grid, including the power plants and related facilities responsible for transferring electrical energy through the system. See id. § 824o(a)(1). Section 215 calls for the Federal Energy Regulatory Commission to certify an Electric Reliability Organization, which, subject to FERC's review, would develop and enforce reliability standards for the bulk-power system. Id. § 824o(a)(2), (c). In 2006, FERC certified the North American Electric Reliability Corporation, a private corporation, as the Electric Reliability Organization. See Alcoa Inc. v. FERC, 564 F.3d 1342, 1345, 385 U.S.App.D.C. 386 (D.C. Cir. 2009). The Corporation, with FERC approval, has promulgated a number of ...


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