United States Court of Appeals, District of Columbia Circuit
September 12, 2017
Petition for Review of an Order of the Federal Energy
Reed argued the cause for petitioner. With him on the briefs
were Steven H. Brose, Daniel J. Poynor, and Steven M. Kramer.
Susanna Y. Chu, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondents. With her on the
brief were James J. Fredricks and Robert J. Wiggers,
Attorneys, U.S. Department of Justice, Robert H. Solomon,
Solicitor, Federal Energy Regulatory Commission, and Beth G.
Pacella, Deputy Solicitor.
Richard E. Powers Jr., Steven A. Adducci, Matthew D. Field,
Thomas J. Eastment, Gregory S. Wagner, David A. Berg, Jeffrey
M. Petrash, and James H. Holt were on the brief for Shippers
Intervenors in support of the Federal Energy Regulatory
Before: Kavanaugh and Srinivasan, Circuit Judges, and
Edwards, Senior Circuit Judge.
EDWARDS, SENIOR CIRCUIT JUDGE:
to authority granted to it under the Interstate Commerce Act,
49 U.S.C. app. § 15(1) (1988), and the Energy Policy Act
of 1992, Pub. L. No. 102-486, § 1801(a), 106 Stat. 2776,
3010 (codified at 42 U.S.C. § 7172 note (2006)), the
Federal Energy Regulatory Commission ("FERC" or
"Commission") employs an indexed ratemaking system
to govern oil pipeline rates. See Order No. 561,
Revisions to Oil Pipeline Regulations Pursuant to the
Energy Policy Act of 1992, 58 Fed. Reg. 58, 753, 58,
753-54 (Nov. 4, 1993). The Commission calculates the index
each year using a formula aimed at capturing the change in
costs experienced by the oil pipeline industry. Id.
at 58, 754. It reexamines the formula it utilizes to set the
annual index every five years. Id. With limited
exceptions, it has applied a generally consistent
methodology, approved by this court, to calculate the change
in normal industry costs at each five-year interval. See
Ass'n of Oil Pipe Lines v. FERC (AOPL I),
83 F.3d 1424 (D.C. Cir. 1996).
December 17, 2015, after engaging in notice and comment
rulemaking, the Commission issued an order adopting the index
formula for the 2016 to 2021 period. Five-Year Review of
the Oil Pipeline Index, 80 Fed. Reg. 81, 744 (Dec. 31,
2015) [hereinafter 2015 Order]. The Association of Oil
Pipelines ("AOPL") filed a petition for review of
the 2015 Order in this court on February 16, 2016. AOPL
alleges that the Commission acted arbitrarily and
capriciously in violation of the Administrative Procedure Act
("APA") by departing in two ways from the
methodology used in past index reviews: First, according to
AOPL, FERC, without reasoned explanation, impermissibly
relied solely on the middle 50 percent of pipeline
cost-change data and failed to incorporate the middle 80
percent of cost-change data. Second, AOPL asserts that FERC,
without adequate justification, impermissibly used "Page
700" cost-of-service data to calculate the index level
instead of the "Form No. 6" accounting data that
had been employed in the past. We find no merit in AOPL's
"[t]he Commission, not this or any court,
regulates" oil pipeline rates, our role on review of the
2015 Order is limited. FERC v. Elec. Power Supply
Ass'n, 136 S.Ct. 760, 784 (2016). The record makes
it plain that the Commission adequately and reasonably
explained its decision not to consider the middle 80 percent
of pipelines' cost-change data. Furthermore, contrary to
AOPL's assertion, nothing in any of FERC's past index
review orders bound the agency to use the middle 80 percent
of pipelines' cost-change data. Likewise, the
Commission's rationale for utilizing the cost-of-service
data from Page 700 is clear and reasonable. And there is
nothing in the record to support AOPL's claim that
FERC's decision to use Page 700 data indicates an
unexplained shift in its measurement objective. In this
situation, the words of the Supreme Court are quite apt:
The disputed question[s in this case involve] both technical
understanding and policy judgment. . . . Our important but
limited role is to ensure that the Commission engaged in
reasoned decisionmaking- that it weighed competing views,
selected [an index] with adequate support in the record, and
intelligibly explained the reasons for making that choice.
FERC satisfied that standard. . . . [T]he Commission met its
duty of reasoned judgment. FERC took full account of the
alternative policies proposed, and adequately supported and
explained its decision.
Id. The conclusions reached by the Court in FERC
v. Electric Power Supply Association apply here as well.
We therefore deny the petition for review.
Statutory and ...