Duke Energy Progress , LLC v. Federal Energy Regulatory Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 10, 2024 Decided July 9, 2024
No. 21-1272
DUKE ENERGY P ROGRESS , LLC,
P ETITIONER
v.
F EDERAL ENERGY R EGULATORY C OMMISSION,
R ESPONDENT
EDGECOMBE S OLAR LLC,
INTERVENOR
Consolidated with 22-1072, 22-1284, 22-1327
On Petitions for Review of Orders of the
Federal Energy Regulatory Commission
Misha Tseytlin argued the cause for petitioner. With him
on the briefs were Christopher R. Jones, Antonia M. Douglas,
and Kevin M. LeRoy.
Jennifer T. Harrod and Robert B. Josey were on the brief
for amici curiae North Carolina Utilities Commission and the
Public Staff - North Carolina Utilities Commission in support
of petitioner. Louis S. Watson, Jr. entered an appearance.

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Beth G. Pacella, Deputy Solicitor, Federal Energy
Regulatory Commission, argued the cause for respondent.
With her on the brief were Matthew R. Christiansen, General
Counsel, and Robert H. Solomon, Solicitor.
Tyler O’Connor argued the cause for intervenor. With him
on the brief were Holly Rachel Smith and Larry F. Eisenstat.
Amanda S. Berman entered an appearance.
Before: WILKINS and C HILDS , Circuit Judges, and
EDWARDS , Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge C HILDS .
C HILDS , Circuit Judge. Petitioner, Duke Energy Progress,
LLC (“Duke Energy”), seeks review of two orders by the
Federal Energy Regulatory Commission: (1) rejecting its
agreement with an energy generation company, American
Beech Solar, LLC, and (2) accepting its agreement with
another energy generation company, Edgecombe Solar LLC,
which Duke Energy filed unsigned and under protest. Under
both contracts, the generators would pay Duke Energy to
perform network upgrades enabling them to connect new
generation facilities to the electric grid. But the first agreement
does not require Duke Energy to reimburse the cost of those
upgrades, while the second does. Because we hold that
FERC’s orders were not “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law,” 5 U.S.C.
§ 706(2)(A), we deny the petitions for review.

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I.
A.
Most electricity in the eastern United States is transmitted
on a single grid. That grid is subdivided into regions, each
administered by a nonprofit “System Operator” that monitors
the flow of electricity to ensure, among other things, an
adequate supply of electricity and grid stability. Within each
region, sections of the grid’s physical infrastructure are owned
by “Grid Operators,” typically public utilities, that connect
electricity generation facilities to the grid and transmit the
electricity. The generation facilities connected to a Grid
Operator’s infrastructure may be owned by the Grid Operator
itself or by third parties.
The transmission of electricity in interstate commerce is
governed by the Federal Power Act, 16 U.S.C. § 824(b), which
requires the Federal Energy Regulatory Commission (the
“FERC”) to ensure that the price of electricity is just,
reasonable, and not unduly discriminatory or preferential. 16
U.S.C. § 824d(a), (b). Among the transactions that FERC
regulates is the connection of a new generation facility to the
physical infrastructure owned by a Grid Operator. FERC
promulgated Order 2003 (along with Orders 2003-A, 2003-B,
and 2003-C) to establish “standard procedures and a standard
agreement for interconnecting [large] generators” to
jurisdictional public utilities’ transmission systems.
Standardization of Generator Interconnection Agreements &
Procedures, Order No. 2003, 104 FERC ¶ 61,103 at PP 1, 7
(2003) (“Order 2003”), order on reh’g, Order No. 2003-A, 106
FERC ¶ 61,220 (2004) (“Order 2003-A”), order on reh’g,
Order No. 2003-B, 109 FERC ¶ 61,287 (2004) (“Order 2003-
B”), order on reh’g, Order No. 2003-C, 111 FERC ¶ 61,401

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(2005) (“Order 2003-C”), aff’d sub nom; see also Ameren
Servs. Co. v. FERC, 880 F.3d 571, 574 (D.C. Cir. 2018).
Under these standard procedures, a generator must request
FERC’s approval to connect a new generation facility to the
grid. Ameren Servs. Co., 880 F.3d at 572. The System
Operator for the relevant grid section will then determine if any
Grid Operator needs to upgrade its infrastructure to handle the
increased flow of electricity from the new generation facility.
Id. Importantly, upgrades may be needed on a section of the
grid to which the generator will directly connect and on other
more distant sections of the grid. See Order No. 2003 at n.32.
Order 2003 uses different terminology to refer to the owners of
directly connected sections (“Transmission Providers”) and the
owners of other sections (“Affected System Operators”).
Most of the relevant procedures in Order 2003 relate to the
obligations between generators and Transmission Providers.
For example, the standard procedures include a standard
contract—the pro forma Long Term Interconnection
Agreement (“pro forma Agreement”)—that applies between a
generator and the Transmission Provider to whose system it
proposes to directly connect. Order 2003, Appendix C. If
upgrades are needed, Order 2003 and the pro forma Agreement
require the generator to pay initial upgrade costs and the
Transmission Provider to then reimburse the generator in
installments. Order 2003, Appendix C § 11.4.1.
This dispute is about whether that reimbursement
requirement also applies when connecting a new generation
facility makes network upgrades by an Affected System
Operator necessary.
When subject to Order 2003’s standard procedures, a Grid
Operator (whether a Transmission Provider or Affected System
Operator) can only avoid following such procedures if FERC

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approves a request for a deviation. Xcel Energy Servs. Inc. v.
FERC, 41 F.4th 548, 552 (D.C. Cir. 2022). To obtain a
deviation, a Grid Operator must show that the standard
procedures would unduly affect its existing customers by
submitting a transmission rate filing that “explain[s] the facts
of the case and the assumptions on which its calculation is
based and provide[s] evidentiary support.” Order No. 2003-B
at P 56.
B.
The key players in this dispute are an Affected System
Operator, Duke Energy, and two energy generation companies,
American Beech Solar, LLC (“American Beech”) and
Edgecombe Solar LLC (“Edgecombe”). Duke Energy owns a
section of the grid within the Mid-Atlantic region. American
Beech and Edgecombe proposed to connect new large solar
generating facilities onto a neighboring section of the grid,
which would require $20-30 million in network upgrades to
Duke Energy’s system. In the two FERC proceedings before
us, the parties dispute whether Duke Energy must reimburse
the generators for the cost of those network upgrades.
The first proceeding involves American Beech’s proposed
interconnection. Duke Energy and American Beech executed
an Affected System Operating Agreement under which
American Beech would not seek reimbursement for the
network upgrade costs (the “American Beech Agreement”).
[JA4-82]. After Duke Energy submitted the agreement to
FERC for approval, American Beech submitted comments to
FERC urging it to require reimbursement anyway. Duke
Energy Progress, Comments of American Beech Solar, Docket
No. ER21-1955 [JA95-96]. American Beech argued that the
agreement was not just and reasonable because Duke Energy
had threatened to delay construction of the upgrades,

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preventing American Beech from connecting to the grid, unless
American Beech agreed to forego reimbursement. Id.
Edgecombe moved to intervene in support of American
Beech’s argument that FERC’s rules require Duke Energy to
pay reimbursement. See Duke Energy Progress, Motion to
Intervene and Comments of Edgecombe Solar Energy LLC,
Docket No. ER21-1955 [JA83]; Duke Energy Progress,
Motion for Leave to Answer and Answer of Edgecombe Solar
Energy LLC, Docket No. ER21-1955 [JA246].
FERC agreed and rejected the American Beech
Agreement. See Duke Energy Progress, Order Rejecting
Affected System Operator Agreement, Docket No. ER21-
1955-002, 177 FERC ¶ 61,001 (Oct. 1, 2021) (“October 1st
Order”) [JA196]. FERC held that reimbursement was required
under Order 2003. Id. at P 3. [JA197]. Responding to Duke
Energy’s argument that it had not always required
reimbursement in the past, FERC explained that many of the
prior contracts that Duke Energy identified were
distinguishable because they involved, among other things,
costs that were directly assignable to a generator under Duke
Energy’s Tariff. Id. at P 37 & n.62 [JA210]. FERC explained
that even if it had erroneously not required reimbursement in a
few prior cases, it was still bound to follow the requirements of
Order 2003. FERC also rejected Duke Energy’s arguments that
it was entitled to a deviation, explaining that Duke Energy
failed to support its generalized statement of harm with a
sufficient factual record or show why the circumstances made
it unjust for Duke’s transmission customers to pay the costs of
network upgrades. Id. at P 34 [JA208-09]. FERC directed
Duke Energy to submit a new agreement that provided for
reimbursement payments. Id. at P 41 [JA211] (“Finally, we
are concerned with the delays that American Beech will
experience as a result of [Duke Energy]’s actions with respect
to this agreement. . . . Thus, we urge [Duke Energy] to file a

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revised [agreement] and commence construction of the
required network upgrades expeditiously.”).
In the second proceeding, American Beech had abandoned
its proposed connection, so Edgecombe stepped in to request
that Duke Energy install the same upgrades to accommodate
Edgecombe’s proposed facility. Duke Energy submitted to
FERC a new agreement with Edgecombe providing for the
required reimbursements (the “Edgecombe Agreement”).
[JA275]. But Duke Energy submitted the agreement unsigned
and under protest that it should not be required to pay
reimbursements. [JA275].
FERC approved the Edgecombe Agreement. See Duke
Energy Progress, Docket No. ER22-1807, 180 FERC ¶ 61,005
(July 5, 2022); Duke Energy Progress, Notice of Denial of
Rehearing by Operation of Law and Providing for Further
Consideration, Docket No. ER22-1807-001, 180 FERC ¶
62,114 (Sept. 6, 2022); Duke Energy Progress, Order
Addressing Arguments Raised on Rehearing, Docket No.
ER22-1807-001, 181 FERC ¶ 61,197 (Dec. 13, 2022)
(“December 13th Order”). In its orders approving the
Edgecombe Agreement, FERC explained that “the arguments
that Duke raises for the first time in its Request for Rehearing
were previously raised in the separate American Beech
proceedings in Docket No. ER21-1955. Consequently, the
Commission has already explained why Duke’s arguments are
without merit, and we adopt the reasoning in the October 2021
Order and April 2022 Rehearing Order in this order.”
December 13th Order at P 29. [JA428].
Duke Energy seeks review of FERC’s orders in both
proceedings.

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II.
Before reaching the merits, we reject FERC’s two
threshold objections that: (1) Duke Energy’s petitions for
review as to the American Beech Agreement are moot and (2)
Duke Energy failed to preserve its arguments as to the
Edgecombe Agreement.
A.
A controversy is not moot if the court’s decision would
“affect the rights of the litigants.” Chamber of Com. of U.S. v.
EPA, 642 F.3d 192, 199 (D.C. Cir. 2011) (citations omitted).
Here, our decision in the American Beech proceeding will
affect Duke Energy’s right to enter into an Affected System
Operator Agreement without reimbursement. Duke Energy
explains that it filed the Edgecombe Agreement pursuant to
FERC’s instructions in the American Beech proceeding; it filed
the agreement unsigned and subject to its objection that
reimbursement should not be required. FERC has not walked
back its instruction for Duke Energy to enter into a new
Affected System Operator Agreement, and it continues to
maintain that Duke Energy’s new Affected System Operator
Agreement must provide for reimbursement. If Duke Energy
were to prevail on the merits, and the Court were to reverse or
vacate FERC’s order rejecting the American Beech
Agreement, Duke Energy could withdraw the Edgecombe
Agreement. Reply Br. 29. And it could refuse to enter into
another Affected System Operator Agreement that provided for
reimbursement. Thus, Duke Energy’s petition for review of the
American Beech Order is not moot.
B.
Duke Energy has also adequately preserved its objections
to the Edgecombe Agreement. Under FERC’s precedent, it

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“will reject new arguments on rehearing that could have been
made originally.” La. Pub. Serv. Comm’n v. Entergy Corp.,
172 FERC ¶ 61,056, at P 38 (2020). Because Duke Energy did
not raise its objection to the reimbursement requirement in the
Edgecombe proceeding until its motion for rehearing, FERC
argues that those arguments have been forfeited. But the
precedent on which FERC relies is inapt.
This case is not one in which new arguments or evidence
presented on rehearing raise concerns of “fairness and due
process.” See, e.g., Omaha Pub. Power Dist., 164 FERC ¶
61,238, at P 11 (2018). The American Beech proceeding arose
directly from the Edgecombe proceeding, and Duke Energy
made clear in its Edgecombe filings that it continued to press
its earlier objections. When FERC rejected Duke Energy’s
agreement with American Beech, it directed Duke Energy to
file a new agreement that provided for reimbursement. See
October 1st Order at P 41 [JA211] (“urg[ing]” Duke Energy
“to file a revised [Agreement] and commence construction of
the required network upgrades expeditiously.”). In response,
Duke Energy submitted the unsigned Edgecombe contract
under protest. In the letter accompanying its Edgecombe filing,
Duke Energy raised its objection to reimbursement: “[Duke
Energy] has not executed the [Edgecombe Agreement] because
it objects to the inclusion of the reimbursement provisions for
the costs of network upgrades.” Duke Energy Progress,
Unexecuted Affected System Operating Agreement with
Edgecombe Solar LLC, Transmittal Letter, Docket No. ER22-
1807-000 (May 6, 2022). [JA275]. In the letter, Duke Energy
also referenced FERC’s decision on reimbursement in the
American Beech proceedings. Id. Moreover, Edgecombe was
already aware of Duke Energy’s arguments because it filed
motions responding to those arguments in the American Beech
proceedings. See Duke Energy Progress, LLC, Motion to

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Intervene and Comments of Edgecombe Solar Energy LLC,
Docket No. ER21-1955-000 (June 10, 2021) [JA83].
Finally, FERC’s argument that the two proceedings should
be treated separately because they address different filings and
were assigned different FERC docket numbers is undermined
by the fact that FERC itself treated the proceedings as
connected. In FERC’s order approving the Edgecombe
Agreement, it relied on its orders rejecting the American Beech
Agreement, with no additional case-specific analysis,
explaining that: “All of the arguments that Duke raises for the
first time in its Request for Rehearing were previously raised
in the separate American Beech proceedings . . . the
Commission has already explained why Duke’s arguments are
without merit, and we adopt the reasoning in [the American
Beech orders].” December 13th Order at P 29. [JA428].
III.
Turning now to the merits, we review FERC’s orders
under the Administrative Procedure Act and will “hold
unlawful and set aside agency action, findings, and conclusions
found to be . . . arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A);
see also LSP Transmission Holdings II v. FERC, 45 F.4th 979,
998 (D.C. Cir. 2022). We hold that FERC’s orders did not
violate this standard.
A.
FERC was not arbitrary and capricious in holding that
Order No. 2003 requires Affected System Operators to
reimburse generators for network upgrade costs to the Affected
System Operator’s system.

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As previously mentioned, supra 4, most provisions of
Order 2003 and the pro forma Agreement relate to interactions
between a generator (like American Beech or Edgecombe) and
Transmission Provider (with which the generator proposes to
directly connect). But two relevant provisions of Order 2003’s
preamble address Affected System Operators (like Duke
Energy) directly.
First, Order 2003 requires that: “Transmission credits are
to be paid to the [generator] when upgrades to an Affected
System are constructed and the [generator] has paid for them.”
Order 2003 at P 29.
Second, Order 2003 addresses commenters’ concerns
that transactions between a generator and an Affected System
Operator are not covered by the pro forma Agreement. Id. at
P 736. When connecting a new generation facility will require
upgrades to an Affected System, Order 2003 states “[the pro
forma Agreement] . . . should . . . expressly allow for refunds
to be provided to [a generator] when such Network Upgrades
must be constructed and the [generator] is required to pay for
them.” Id. at P 738. In such a situation, Order 2003 makes the
pro forma Agreement “applicable to all jurisdictional Affected
System Operators on whose systems Network Upgrades are
constructed to accommodate [a generator’s] Interconnection
Request.” Id. “[T]his means that . . . an Affected System
Operator may require the [generator] to pay for . . . Network
Upgrades,” but “upon commencement of commercial
operation, any Affected System Operator that has received
payments from the [generator] must begin to refund to the
[generator] the costs of Network Upgrades that the [generator]
has paid.” Id. And this refund requirement applies “without
regard to whether the [generator] has contracted for delivery
service on the Affected System Operator’s Transmission
System.” Id. The reimbursement requirement is reiterated in

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the following paragraph, which explains that the generator and
Affected System Operator “must enter into an agreement” and
that the agreement “must specify the terms governing . . . the
payment of refunds.” Order 2003 at P 739. FERC, therefore,
amended Article 11.4.1 of the pro forma Agreement to require
that a generator “shall be entitled to a cash refund, equal to the
total amount paid to the Transmission Provider and the
Affected System Operator, if any, for the Network Upgrades.”
Order 2003, Appendix C, § 11.4.1.
Together, FERC claims, these provisions require a
generator and an Affected System Operator to enter into an
agreement addressing network upgrades to the Affected
System. That agreement—whether or not it is otherwise
modeled on the pro forma Agreement—must contain the
reimbursement requirement contained in Article 11.4.1. Resp.
Br. at 35-36. We defer to FERC’s interpretation of its own
ambiguous regulation, so long as the interpretation is
reasonable and “the character and context of the agency
interpretation entitles it to controlling weight.” Kisor v. Wilkie,
139 S. Ct. 2400, 2415-16 (2019).
Here, the text is not at odds with FERC’s interpretation.
Order 2003’s preamble states that the reimbursement
requirement applies to agreements between generators and
Affected System Operators. Language in the preamble of a
rule is a valid “source of evidence concerning
contemporaneous agency intent,” Wyoming Outdoor Council
v. U.S. Forest Serv., 165 F.3d 43, 53 (D.C. Cir. 1999), such that
it can “establish rights and obligations or create binding legal
consequences,” Nat. Res. Def. Council v. EPA, 571 F.3d 1245,
1252 n.2 (D.C. Cir. 2009) (cleaned up). See also Kennecott
Utah Copper Corp. v. Dep’t of Interior, 88 F.3d 1191, 1223
(D.C. Cir. 1996) (explaining that preamble language has

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independent legal effect when an agency intends to bind either
itself or regulated parties).
FERC’s reading that the reimbursement requirement
applies to Affected System Operators also finds support in
Order 2003-C, which states that “both the Transmission
Provider and an Affected System Operator must provide the
20-year lump-sum reimbursement to refund any remaining
balance, even if no transmission service was taken.” Order
2003-C at P 13. Indeed, Duke Energy has several Affected
System Operator Agreements providing for reimbursement.
See, e.g., Duke Energy Progress, Docket No. ER17-567 (Jan.
13, 2017); see also Motion to Dismiss and Answer of Duke
Energy Progress, LLC, Duke Energy Carolinas, LLC, and
Duke Energy Florida, LLC, Docket No. EL21-73-000, at 19
(June 1, 2021) (“The Duke Companies do not dispute that—
absent mutual agreement to address Affected System Network
Upgrade costs in an alternative manner approved by the
Commission—Order No. 2003 requires Affected System
Operators to reimburse [generators] for Affected System
Network Upgrade costs they pay upfront.”).
Duke Energy’s response that it is not subject to the
reimbursement requirement because it is not a party to a pro
forma Agreement with either Edgecombe or American Beech
is beside the point. Duke Energy points to language in Order
2003 that “the owner or operator of an Affected System is not
bound by the provisions of the . . . [pro forma Agreement]”
when it is a third-party non-signatory to that standard
agreement, because “a contract cannot bind a third party that is
not a signatory to it.” Order No. 2003, 104 FERC ¶ 61,103 at
PP 117, 121. Duke Energy argues that only the parties to a
contract can be bound by its terms, so Duke Energy can only
be required to reimburse generators with which it has already
entered into a pro forma Agreement. [Pet. Br. 49-50]. But

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Duke Energy’s obligation to reimburse the generators does not
arise from the pro forma Agreement. Rather, Order 2003
requires Duke Energy to include in its Affected System
Operator Agreements a reimbursement requirement akin to the
one in the pro forma Agreement. Order 2003 at P 738 (making
the reimbursement requirement “applicable to all jurisdictional
Affected System Operators”).
Moreover, the regulatory language that Duke Energy
highlights addresses a different requirement—for the
coordination of interconnection studies and the timing of
network upgrades—not reimbursement. 104 FERC ¶ 61,103 at
P 121. After noting that the coordination requirement in the
pro forma Agreement would not otherwise apply to upgrades
on Affected Systems, FERC made it applicable. Id. Nothing
about this provision undermines FERC’s argument that Order
2003 also makes the reimbursement provision applicable to
Affected System Operators. If anything, this provision
provides another example of Order 2003 imposing
requirements found in the pro forma Agreement to transactions
that the pro forma Agreement itself does not cover.
Finally, it bears noting that Affected System Operators
enter into Affected System Operator Agreements with
generators, rather than the pro forma Agreement. So, if Duke
Energy were correct that it need only reimburse generators with
which it has executed a pro forma Agreement, the
reimbursement requirement would essentially never apply to
Affected System Operators—in direct contradiction of Order
2003. Order 2003 at PP 738-39. We reject this reading of
Order 2003.
B.
FERC also reasonably rejected Duke Energy’s request for
a deviation from the reimbursement requirement. Although

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agency action is arbitrary and capricious when the agency has
“entirely failed to consider an important aspect of the
problem,” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), Duke Energy does
not identify any important aspect of its deviation request that
FERC failed to consider.
Duke Energy argues—for the first time in its petition to
this Court—that a deviation is warranted because its customers
will not receive any corresponding benefit for the $13 million
in network upgrade costs of reimbursement. [Pet. Br. 60-61].
FERC was not arbitrary and capricious in deciding that a
deviation was not justified. To begin, Duke Energy did not
argue before FERC that its customers would receive no benefit
from the upgrades, so the agency cannot be faulted for failing
to consider that argument. Moreover, “the integrated
transmission grid is a cohesive network, and thus completed
upgrades generally benefit all transmission customers.” ESI
Energy v. FERC, 892 F.3d 321, 325 (D.C. Cir. 2018). There is
a rebuttable presumption that a Grid Operator’s customers will
be benefitted by upgrades to its system: “[T]he Transmission
Provider bears the full burden of showing that any such
proposal is just and reasonable and not unduly discriminatory
or preferential, and is appropriate under the circumstances.”
Order 2003-B at P 56. Duke Energy fails to raise any specific
facts or analysis showing why, unlike in a typical case of
network upgrades, the upgrades in this case would not provide
any benefit to its customers.
FERC also considered and reasonably rejected the
American Beech Agreement as a basis for excusing Duke
Energy from the reimbursement requirement. FERC explained
that “American Beech had to choose between signing an
agreement that assigned costs in contravention of Order No.
2003-C or accepting another year of delay, a delay that has

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challenged American Beech’s business model.” October 1st
Order at P 41 [JA211]. Duke Energy’s power to block
American Beech from entering the market was a reasonable
basis for FERC to conclude that the American Beech
Agreement was poor evidence that a deviation was justified.
C.
FERC’s orders in this case also did not run afoul of
Baltimore Gas. See Baltimore Gas & Elec. Co. v. FERC, 954
F.3d 279 (D.C. Cir. 2020) (holding that FERC cannot treat
similarly situated utilities differently without a reasonable
justification, even in uncontested or unreasoned orders).
Although Duke Energy points to several cases in which FERC
approved contracts without reimbursement, FERC adequately
differentiated some of those cases and admitted error in others.
FERC’s explanation for why its prior decisions violated Order
2003 and why Order 2003 required reimbursement in this case
satisfied Baltimore Gas’ reasonable justification requirement.
FERC distinguished several of the cases that Duke Energy
cites in which reimbursement was not required. The two
service agreements (Nos. 258 and 269) at issue in Duke Energy
Fla., Docket No. ER20-2419 (Sept. 2, 2020), for instance,
involved system protection facilities, the costs of which were
directly assignable to [the generator] without reimbursement
under Duke Energy’s FERC-approved tariff. October 1st
Order at n.62 [JA210]. And Mid-American Energy Co.,
Docket No. ER09-1654 (Oct. 22, 2009) and Midwest
Independent Transmission System Operator, Inc., 120 FERC ¶
61,066 (2007) involved circumstances in which the
Commission had approved generally applicable deviations
regarding network upgrade costs. October 1st Order at n.62
[JA210].

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FERC then conceded that some of its prior precedent, for
example, Midwest ISO, 120 FERC ¶ 61,066, was not entirely
consistent with its decision here. [FERC Br. 10.] But it
explained that the requirements of Order 2003 must govern its
decision. October 1st Order at P 37. [JA210]. FERC clarified
its understanding of Order 2003’s requirements that
reimbursement is required unless a Transmission Provider or
Affected System Operator has (1) demonstrated compliance
with a Commission-approved generally applicable deviation
from that requirement; or (2) justified a case-specific deviation
in the circumstances presented regarding the affected system
operating agreement at issue. And it advised the Court that it
will “always follow that precedent going forward.” Oral
Argument at 49:53. Once an agency has acknowledged that
some of its prior cases were wrongly decided, this Court’s
precedent does not require the agency to endlessly repeat its
error for the sake of consistency. See Chem-Haulers, Inc. v.
ICC, 565 F.2d 728, 730 (D.C. Cir. 1977) (“The mere fact that
the [agency] may have nodded on one occasion does not entitle
a litigant to a repetition of its blunder . . .”); Tex. Int’l Airlines
v. Civil Aeronautics Bd., 458 F.2d 782, 785 (D.C. Cir. 1971)
(“Assuming that the Government made a mistake . . . in the
application of the regulation, the law does not require the
Government to perpetuate the mistake.”). FERC adequately
acknowledged that its prior orders were inconsistent with its
regulations and explained that Order 2003 requires
reimbursement, thereby satisfying Baltimore Gas.
*****
For the foregoing reasons, we deny the petitions for
review.
So ordered.

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