Affirmed Energy, LLC v. Federal Energy Regulatory Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 6, 2025 Decided February 10, 2026
No. 25-1091
AFFIRMED ENERGY, LLC,
P ETITIONER
v.
FEDERAL ENERGY R EGULATORY C OMMISSION,
R ESPONDENT
M ONITORING ANALYTICS , LLC, AND PJM INTERCONNECTION,
LLC,
INTERVENORS
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
Seth P. Waxman argued the cause for petitioner. With him
on the briefs were Kyle T. Edwards, Kelly P. Dunbar, David
M. Levine, and Megan Gardner.
Jared Fish, Senior Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on
the brief were David L. Morenoff, Acting General Counsel,
Robert H. Solomon, Solicitor, and Susanna Y. Chu, Senior
Attorney.

-- 1 of 51 --

2
John L. Shepherd Jr. argued the cause for respondent-
intervenors. With him on the brief were Blake Grow, Johnson
Mihaly, Christopher O’Hara, and Jeffrey W. Mayes.
Before: HENDERSON and P AN , Circuit Judges, and
GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge HENDERSON.
Opinion dissenting in part filed by Circuit Judge P AN .
KAREN LEC RAFT H ENDERSON , Circuit Judge: The issue
presented by petitioner Affirmed Energy LLC (Affirmed) is
whether the Federal Energy Regulatory Commission (FERC)
permissibly approved a tariff amendment prohibiting
companies from bidding Energy Efficient Resources (EERs) in
capacity auctions. The auctions are run by PJM
Interconnection LLC (PJM), the entity responsible for
managing the electrical grid in portions of thirteen States and
the District of Columbia. At the auctions, PJM purchases
commitments to supply electrical capacity to its grid. With
FERC’s permission, PJM allowed providers of EERs, which
continuously reduce electrical consumption, to bid EER
projects at its auctions. In other words, EERs could treat their
resources as commitments to supply electricity, rather than to
reduce electrical consumption, and could bid those
commitments at the auctions. If PJM accepted an EER
provider’s bid, PJM permitted that provider to bid the same
project at up to three more auctions. PJM permitted this action
in part to offset a four-year lag between when EER projects
became operational and when PJM’s statistical model, known
as a load forecast, could capture those projects’ effects on
energy consumption. Although PJM had since 2009 allowed
providers to bid EERs at its auctions, it proposed to sunset that
permission in 2024, explaining that its updated load forecast

-- 2 of 51 --

3
fixed the four-year lag. FERC accepted the proposed tariff
amendment. It found that the amendment would reduce costs
for end-use customers without compromising grid reliability.
One EER provider, Affirmed, now petitions for review of
FERC’s orders.
Affirmed contends that FERC violated the filed-rate
doctrine by retroactively divesting it of the right to participate
in at least two more capacity auctions. It also argues that
FERC’s orders were arbitrary and capricious because FERC
uncritically accepted PJM’s updated load forecast, overlooked
reliance interests based on the existing tariff and ignored that
tariff’s substantial benefits. We disagree with both claims.
FERC’s orders were not impermissibly retroactive under our
caselaw because the amendment applied solely to future
capacity auctions. FERC critically reviewed PJM’s updated
forecast and explained why the forecast was fit for its intended
purpose. And it acknowledged that its decision might upset
reliance interests and reduce incentives to invest in EERs but it
explained that those costs were outweighed by other
considerations.
I. Background
A. PJM’s Electrical Grid
In the 1935 Federal Power Act (FPA), the Congress
charged FERC (then, the Federal Power Commission) with
superintending the interstate sale of electricity. Federal Power
Act of 1935, ch. 687, pt. II, 48 Stat. 838, 847 (codified as
amended at 16 U.S.C. § 824 et seq.). Under that authority,
FERC oversees entities, known as Regional Transmission
Organizations (RTOs), which manage the electrical grid in
their respective regions. Pub. Citizen, Inc. v. FERC, 7 F.4th
1177, 1186 (D.C. Cir. 2021). RTOs carry out several key

-- 3 of 51 --

4
responsibilities, which include “operating the grid in particular
geographic areas, . . . balancing supply and demand, and
ensuring a reliable transmission system.” Id. PJM is an RTO.
Off. of Pub. Participation, Fed. Energy Regul. Comm’n, An
Introductory Guide for Participation in PJM Processes 2
(2025). To discharge its responsibilities, PJM hosts capacity
auctions at least once each year. See Morgan Stanley Cap. Grp.
v. Pub. Util. Dist. No. 1 of Snohomish Cnty., 554 U.S. 527, 537
(2008). At the auctions, PJM purchases commitments to
supply its grid with electrical capacity for a future delivery
year, usually more than three years ahead. See PJM, 2025/2026
Base Residual Auction Report 1, 4 (2024).
The capacity auctions work in this way: Providers bid the
price they will accept in exchange for their promise to supply
electricity. See Hughes v. Talen Energy Mktg., LLC, 578 U.S.
150, 155 (2016). PJM uses those bids, in conjunction with its
estimate of demand, to set a “clearing price” for the auction.
PJM Power Providers Grp. v. FERC, 96 F.4th 390, 395 (3d
Cir. 2024). Any provider who submits a bid below (i.e.,
“clears”) the clearing price will receive that price in exchange
for its commitment to provide electricity. Talen Energy Mktg.,
578 U.S. at 155–56. PJM continues to purchase capacity
commitments until it satisfies projected demand (known as the
reliability requirement). Id.
EERs—including efficient light bulbs and appliances—
have posed a unique problem for capacity auctions. The reason
is simple: EERs reduce the amount of capacity that PJM must
procure at each auction. For example, if a consumer installs a
more efficient refrigerator, he will, all else being equal,
consume less electricity. Use of Energy Explained, U.S.
Energy Info. Admin. (Jan. 12, 2024), https://www.eia.gov/
energyexplained/use-of-energy/efficiency-and-conservation.php
[https://perma.cc/5G9P-SL4N]. And the difference between his

-- 4 of 51 --

5
old and new consumption constitutes electricity that PJM no
longer needs to procure at auction. For many years, however,
PJM could not capture the effects of EERs in the statistical
model it uses to predict demand—its “load forecast.” J.A. 120,
Gledhill Aff. ¶¶ 16–17. To account for EERs at all, then, PJM
needed to do so at its capacity auctions, by permitting EER
providers to bid their projects as commitments to provide
electricity.
Since 2009, PJM has allowed EER providers to participate
in its auctions. See PJM Interconnection, L.L.C., Order
Accepting Tariff Provisions in Part, 126 FERC ¶ 61,275,
PP 120, 131 (2009) (2009 Order). Central to Affirmed’s
petition are two tariff provisions that FERC approved in 2009.
First, Section L.1 of PJM’s tariff defines eligible EERs. Its
definition encompasses only projects that continuously reduce
electrical consumption and that are not already reflected in the
load forecast:
An Energy Efficiency Resource is a project . . .
designed to achieve a continuous . . . reduction
in electric energy consumption at the end-use
customer’s retail site that is not reflected in the
peak load forecast prepared for the Delivery
Year for which the Energy Efficiency Resource
is proposed . . . .
J.A. 60. Second, Section L.4 establishes the time frame in
which an EER provider can bid a particular project:
An Energy Efficiency Resource that clears an
auction for a Delivery Year may be offered in
auctions for up to three additional consecutive
Delivery Years, but shall not be assured of
clearing in any such auction . . . .

-- 5 of 51 --

6
J.A. 61. In other words, Section L.4 permits EER providers to
bid an EER project in up to four consecutive auctions—the
initial auction at which the project clears and three more. PJM
chose this four-auction time frame in part to match the four-
year lag in its load forecast. 2009 Order, 126 FERC ¶ 61,275,
P 132. With FERC’s permission, PJM added these provisions
to its tariff on file with FERC, as well as to its contracts with
providers in its region.
The four-year lag did not remain for long. In 2016, PJM
deployed a model that, in theory, fixed the lag. To achieve this
goal, PJM incorporated “end-use intensity values,” which it
obtained from the Energy Information Administration (EIA), a
statistical entity within the U.S. Department of Energy. J.A.
118, 120–21, Gledhill Aff. ¶¶ 6–7, 18. End-use intensity
measures a technology’s “relative use over time” and it has two
critical features. J.A. 121, Gledhill Aff. ¶ 20. The first is
“saturation,” or the proportion of all homes and commercial
floorspaces with the technology. J.A. 121, Gledhill Aff. ¶ 20.
The second is “efficiency,” or the reduction in electrical usage
the technology produces. J.A. 121, Gledhill Aff. ¶ 20. With
these forward-looking data available, PJM concluded, it could
capture the effects of EERs without the lag.
This development posed an issue for grid reliability.
Because PJM accounted for EERs both in its load forecast and
at its auctions, PJM wound up double counting their effects on
electrical consumption. To illustrate: Assume that EER
projects reduce the number of megawatts (MW) that end-use
customers consume by 20 in a given delivery year. If PJM
forecasted a demand of 100 MW for that year, its projection
would account for those 20 MW of energy efficiency. In other
words, but-for its updated modeling, PJM would have
forecasted demand for 120 MW. Assume further that PJM

-- 6 of 51 --

7
purchased commitments from EER providers to provide 20
MW of capacity for the same delivery year. In this
hypothetical, PJM would purchase only 80 MW of actual
capacity compared to its reliability requirement of 100 MW.
Thus, by double counting the effects of EERs, PJM risked
obtaining less capacity than it needed.
To counteract that risk, PJM introduced an “addback”
mechanism. For each MW attributable to EERs that “cleared”
at auction, PJM added one MW to its reliability requirement.
In other words, if PJM predicted that it needed to obtain 100
MW for a given delivery year and it obtained 20 of those MW
from EERs at auction, PJM would shift its reliability
requirement from 100 MW to 120 MW. In this way, PJM
ensured that EER providers’ participation did not prevent it
from purchasing enough capacity.
Although the addback promoted grid reliability, the
reliability came at a price: The addback required the utilities
and, ultimately, end-use customers within PJM’s region to
shoulder the costs of capacity payments for EERs without
benefiting from a corresponding reduction in the reliability
requirement. As PJM put it, the addback was “at odds with the
notion that resources being paid capacity rates should actually
provide capacity.” J.A. 34–35. Accordingly, in September
2024, PJM proposed to “prospectively sunset” EERs’ auction
eligibility, beginning with July 2025’s auction for the 2026/27
delivery year. J.A. 1. PJM submitted a filing under section 205
of the FPA, seeking permission to amend Section L of the tariff
to reflect that change. The proposed amendment stated that no
EERs would “qualify” for the auctions “beginning with the
2026/2027 Delivery Year.” J.A. 59.
Given its updated load forecast, PJM explained in an
accompanying letter, it had determined that EER participation

-- 7 of 51 --

8
raised costs for consumers without incrementally reducing the
reliability requirement. It observed that capacity payments for
EERs had proven increasingly onerous, cresting at $144
million for the 2025/26 delivery year alone. And it noted that
its decision was backed by a supermajority of its stakeholders
and was the product of nearly one year’s deliberation.
To support its filing, PJM submitted an affidavit from one
of its managers. The manager provided a detailed overview of
PJM’s load forecast, as well as its plan to exclude EERs from
the auctions. For example, he identified the source of PJM’s
data underlying its load forecast. PJM acquires publicly
available data from the EIA, he noted, comprising both
historical energy usage (from the EIA’s Form EIA-861M) and
prospective energy usage (from its Annual Energy Outlook).
PJM then supplements those data with information obtained
from outside vendors. In recent years, he observed, PJM has
acquired supplemental data on “behind-the-meter solar and
electric vehicle charging trends.” J.A. 118, Gledhill Aff. ¶ 7.
He also discussed how the load forecast functioned. PJM ran
regression models for different sectors, he explained—
residential, commercial and industrial. It finetuned those
models on the basis of variables affecting electrical
consumption, like historical weather patterns, peak shaving,
behind-the-meter storage and data-center activity. In its load
forecast for 2024, for example, PJM produced “377 forecast
scenarios for every hour” of the year based on variability in
weather alone. J.A. 120, Gledhill Aff. ¶ 15.
The manager also explained that PJM met with
stakeholders and outside consultants to refine its load forecast.
One meeting with a third-party consultant, Itron, Inc., led to a
publicly available report on PJM’s forecast. The manager also
pointed out that various PJM stakeholder groups, including its

-- 8 of 51 --

9
Load Analysis Subcommittee and Planning Committee, meet
periodically to evaluate and provide input on the forecast.
Finally, the manager supplied two pieces of evidence that
the load forecast did, in fact, capture EERs. First, for delivery
year 2023/24, PJM’s predicted peak load was lower than its
actual peak load. Second, and relatedly, a recent short-term
forecast had exceeded an older, long-term forecast for the
2024/25 delivery year. If the load forecast had in fact failed to
capture EERs, the manager opined, both results should have
flipped. The long-term forecast would be higher than the short-
term forecast and actual peak load because the latter two
metrics are more accurate and, hence, more likely to capture
EERs. These patterns confirmed, in the manager’s view, that
the forecast captured EERs accurately. He acknowledged that
the forecast was “not so granular as to track” any individual
EER project but he concluded that it could “reasonably
capture[]” the EERs’ aggregate effects on electrical
consumption. J.A. 125, Gledhill Aff. ¶ 35.
On the basis of its letter and its manager’s affidavit, PJM
requested that FERC approve its amendment.
B. Affirmed’s Claim
Affirmed does not sell or manufacture EERs itself.
Instead, Affirmed “contracts with manufacturers, retailers, and
distributors” of EERs “in exchange for the contractual rights to
the capacity reductions from those energy efficient products.”
Pet’r’s Br. add. 10, Abram Decl. ¶ 6. Affirmed then
“aggregates the expected future energy capacity reductions
from those products” and participates in capacity auctions,
offering “commitments to reduce energy consumption” in
exchange for capacity payments in PJM’s region. Pet’r’s Br.
add. 9–10, Abram Decl. ¶¶ 4–7. It then passes along a portion

-- 9 of 51 --

10
of those payments to EER manufacturers and retailers. Stated
simply, Affirmed’s business model runs on capacity payments.
If EERs are excluded from the auctions, Affirmed will be left
without a material source of revenue. Affirmed bid projects at
the 2023/24 and 2024/25 delivery-year auctions. Its bids
cleared at each auction. Under Section L.4 of the tariff, then,
Affirmed planned to bid those projects in at least the 2026/27
and 2027/28 delivery-year auctions.
In response to PJM’s filing seeking the above-described
tariff amendment, Affirmed submitted a protest.1 In it,
Affirmed highlighted several “deficiencies” in PJM’s proposal
that, it asserted, warranted FERC’s rejection. J.A. 162. Among
other things, Affirmed criticized PJM’s updated load forecast,
challenging PJM’s evidence that the model accurately captured
EERs. And it contended that PJM’s proposal would, if
approved, retroactively divest it of the right to participate in the
2026/27 and 2027/28 delivery-year auctions.
FERC approved PJM’s amendment. PJM Interconnection,
L.L.C., Order Accepting Tariff Revisions, 189 FERC ¶ 61,095,
P 1 (2024) (Order). FERC determined that the amendment
reduced costs for consumers without compromising PJM’s grid
reliability and was therefore just and reasonable under FPA
section 205. Id. P 63; 16 U.S.C. § 824d(a). And it noted that
Section L.4’s raison d’être—the four-year lag in the load
forecast—no longer existed. Order, 189 FERC ¶ 61,095, P 62.
Thus, FERC allowed PJM to exclude EERs from its auctions,
starting with the July 2025 auction.
1 A protest is distinct from a petition for rehearing.
Anyone can protest a tariff filing. 18 C.F.R. § 385.211(a)(1).
A petition for rehearing, among other things, preserves
arguments for judicial review. 16 U.S.C. § 825l(b).

-- 10 of 51 --

11
FERC also addressed the protestors’ arguments. Order,
189 FERC ¶ 61,095, P 64. In response to the argument that
FERC’s order operated retroactively, FERC concluded that its
order applied wholly prospectively, beginning with the July
2025 auction for the 2026/27 delivery year. Id. P 71. And
although its decision could upset providers’ expectations, as
some protestors had contended, FERC believed that the
benefits of its decision outweighed those costs. Id. P 72. PJM
would continue to honor existing capacity commitments,
FERC pointed out, and the record lacked evidence about the
extent to which PJM’s proposal would undercut sunk
investments. Id.
In response to other arguments, FERC conceded that
PJM’s forecast might not perfectly capture the EERs’ effects
on demand. Order, 189 FERC ¶ 61,095, P 69. But it
determined that the forecast would “reasonably” capture those
effects. Id. It found the forecast reliable because PJM
incorporated publicly available data widely relied on in the
industry and refined its forecast through meetings with outside
consultants and stakeholders. Id.
Finally, FERC rejected the argument that the benefits of
EER participation were necessary to achieve just and
reasonable rates. Order, 189 FERC ¶ 61,095, P 70. FERC
recognized that capacity payments might “increase incentives
to invest” in EERs. Id. But it did not view those incentives as
“necessary to ensure just and reasonable rates,” particularly
because PJM would continue to account for EERs in its load
forecast and, hence, its reliability requirement. Id.
One month after FERC accepted the amendment,
Affirmed moved for a stay and petitioned for rehearing. See 5
U.S.C. § 705; 16 U.S.C. § 825l. In its motion, Affirmed argued
that FERC’s order posed an existential threat to its operations,

-- 11 of 51 --

12
leaving it saddled with $50 million in sunk investments and
forcing it to cease operations once it met its obligations for the
2025/26 delivery year.
In January 2025, FERC denied Affirmed’s rehearing
petition by failing to decide it within 30 days. PJM
Interconnection, L.L.C., Notice of Denial of Rehearing by
Operation of Law and Providing for Further Consideration, 190
FERC ¶ 62,005 (2025). It stated that it would address the
substance of Affirmed’s rehearing petition and stay motion in
a future order. Id.
The following month, FERC issued an order explaining its
rationale. PJM Interconnection, L.L.C., Order Addressing
Arguments Raised on Rehearing and Denying Stay, 190 FERC
¶ 61,081, P 1 (2025) (Rehearing Order). FERC elaborated on
its rationale for concluding, among other things, that PJM’s
load forecast captured the effects of EERs, id. PP 31–34, and
that the benefits of its decision outweighed the harm to existing
reliance interests, id. PP 36–38. It noted that Section L.1 of the
tariff put providers on notice that improvements to the forecast
might render their projects ineligible for the auctions, which, in
turn, diminished the providers’ reasonable reliance interests.
Id. P 38.
Affirmed filed petitions for review of all three orders. PJM
moved to intervene, as did the Independent Market Monitor on
PJM’s behalf, and we granted both motions.
II. Analysis
We have jurisdiction of Affirmed’s petition, 16 U.S.C.
§ 825l(b), and we review de novo the claim that FERC violated
the filed-rate doctrine, SFPP, L.P. v. FERC, 967 F.3d 788, 802
(D.C. Cir. 2020) (per curiam). We review Affirmed’s

-- 12 of 51 --

13
remaining claims under the Administrative Procedure Act’s
arbitrary-and-capricious standard. 5 U.S.C. § 706(2)(a).
Under that standard, we will uphold an agency’s decision if it
is “reasonable and reasonably explained.” FCC v. Prometheus
Radio Project, 592 U.S. 414, 423 (2021). An agency’s
decision is arbitrary and capricious if the agency entirely fails
to consider an important aspect of the problem before it or
ignores the reasonable reliance interests of regulated parties.
Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 591
U.S. 1, 30–32 (2020). An agency’s decision is also arbitrary
and capricious if it merely rubberstamps a regulated party’s
analysis. Susquehanna Int’l Grp., LLP v. Sec. & Exch.
Comm’n, 866 F.3d 442, 447 (D.C. Cir. 2017).
In its petition, Affirmed contends that FERC’s orders
violated the filed-rate doctrine by retroactively divesting
Affirmed of the right to participate in at least two more capacity
auctions. Affirmed also asserts that FERC’s orders were
arbitrary and capricious for three reasons: First, FERC
impermissibly rubberstamped PJM’s load forecast instead of
critically reviewing PJM’s analysis or conducting its own;
second, FERC unreasonably discounted the benefits of EER
participation; and third, FERC failed to consider the EERs’
reliance interests. We consider each argument in turn.
A.
Affirmed contends that FERC’s orders violate the filed-
rate doctrine. It asserts that it obtained the right under Section
L.4 to bid at the 2026/27 and 2027/28 delivery-year auctions
when its bids cleared at the 2023/24 and 2024/25 delivery-year
auctions. And FERC’s orders, it maintains, retroactively
divested it of that tariff-based right. It bases its argument on
the Supreme Court’s decision in Landgraf v. USI Film
Products, which deemed retroactive laws that “attach[] new

-- 13 of 51 --

14
legal consequences to events completed before their
enactment,” or which “take[] away or impair[] vested rights
acquired under existing laws.” 511 U.S. 244, 269–70 (1994)
(citation modified).
We interpret tariff provisions according to their “plain
meaning.” Okla. Gas & Elec. Co. v. FERC, 11 F.4th 821, 827
(D.C. Cir. 2021). We do not doubt that under Section L.4’s
plain meaning, Affirmed obtained permission to bid at up to
four consecutive auctions. Our only concern is whether FERC
properly approved PJM’s revocation of that permission.
The answer to that question lies in the filed-rate doctrine
or its corollary, the rule against retroactive ratemaking. The
filed-rate doctrine prohibits a utility from charging “any rate
other than the one on file with the Commission.” Verso Corp.
v. FERC, 898 F.3d 1, 10 (D.C. Cir. 2018) (quoting W. Deptford
Energy, LLC v. FERC, 766 F.3d 10, 12 (D.C. Cir. 2014)). And
the rule against retroactive ratemaking prohibits a utility from
“set[ting] rates to recoup past losses” and FERC from
“prescrib[ing] rates on that principle.” City of Piqua v. FERC,
610 F.2d 950, 954 (D.C. Cir. 1979) (quoting Nader v. FCC,
520 F.2d 182, 202 (D.C. Cir. 1975)); accord Pub. Serv. Co. of
N.H. v. FERC, 600 F.2d 944, 958 (D.C. Cir. 1979) (“A rate
designed to recoup past losses is retroactive and illegal.”). The
bar on retroactive ratemaking is a “corollary” of the filed-rate
doctrine, precluding FERC “from doing indirectly what it
cannot do directly”—that is, allowing a utility to collect a rate
other than the filed rate. SFPP, L.P., 967 F.3d at 801–02
(quotations omitted). These rules are “not limited to rates per
se but also extend[] to matters directly affecting rates.” Okla.
Gas & Elec. Co., 11 F.4th at 829 (citation modified).
In the domain of interstate electricity, we have based these
rules on the FPA’s text. Section 205 of the FPA requires

-- 14 of 51 --

15
utilities to file tariffs with FERC “reflecting the rates they
charge and the related rules.” Cent. Hudson Gas & Elec. Corp.
v. FERC, 138 F.4th 531, 533 (D.C. Cir. 2025) (citing Hecate
Energy Greene Cnty. 3 LLC v. FERC, 72 F.4th 1307, 1309–10
(D.C. Cir. 2023)); 16 U.S.C. § 824d(c). And section 206
empowers FERC, with exceptions not relevant to this petition,
to “fix rates and charges, but only prospectively.” Towns of
Concord, Norwood & Wellesley v. FERC, 955 F.2d 67, 72
(D.C. Cir. 1992); 16 U.S.C. § 824e(a).
Affirmed characterizes its filed-rate claim as a challenge
to retroactive ratemaking. Because neither PJM nor FERC has
attempted to impose something other than the rate on file, we
agree that Affirmed’s claim is best conceptualized as one of
retroactivity, to the extent that these rules diverge in practice.
See Associated Gas Distribs. v. FERC, 898 F.2d 809, 810 (D.C.
Cir. 1990) (mem.) (per curiam) (Williams, J., concurring in the
denial of rehearing and rehearing en banc).
Our precedent makes clear that FERC’s orders were not
impermissibly retroactive. We have upheld an agency’s
authority to impose a new auction rule, even if that rule
divested regulated parties of a permission they had obtained
under an earlier regime. DIRECTV, Inc. v. FCC, 110 F.3d 816
(D.C. Cir. 1997). In DIRECTV, we considered whether the
Federal Communications Commission (FCC) retroactively
divested petitioners of the right to acquire satellite channels
surrendered by another party. Id. at 825–26. The FCC had
granted permits to several applicants to construct satellites.
Those permits came subject to certain requirements, including
an obligation to begin operating within six years of receiving
the permit. Id. at 822 (quoting 47 C.F.R. § 100.19(a)). By
order, the FCC afforded the permittees a “reservation[],”
granting them the “first right” to a pro-rata share of any channel
of a surrendered or cancelled permit. Id. (quotation omitted).

-- 15 of 51 --

16
When the FCC canceled one permit, however, it decided to
auction off the permittee’s fifty-one channels instead. Id. at
823.
Several permittees filed petitions, contending that the
FCC’s new auction rule was impermissibly retroactive. Like
Affirmed, they argued that the FCC’s new auction rule
“divest[ed] them each of [a] right” “that they had been given in
the [earlier] order.” DIRECTV, 110 F.3d at 825. We analyzed
the permittees’ claim there, as Affirmed asks us to do here,
under the Supreme Court’s decision in Landgraf, which deems
retroactive those laws that “impair rights a party possessed
when he acted.” 511 U.S. at 280. Still, we rejected the
permittees’ arguments. We recognized that the permittees
“may reasonably have expected that, under the” first order,
“they would receive a pro rata portion of any channels the
[FCC] reclaimed.” DIRECTV, 110 F.3d at 826. But that order
did not, we concluded, foreclose it from taking a different
approach moving forward. Indeed, the FCC’s order “was itself
entirely prospective: it set forth what the FCC intended to do if
a certain condition were to arise, which it later did.” Id. In
view of these circumstances, we concluded that the new
auction rule was not retroactive.2
2 The partial dissent distinguishes DIRECTV principally on
the ground that the FCC had “never implemented” its binding
order. Partial Dissenting Op. 14. In our view, that distinction
does not matter. An agency’s progress towards implementing
a guarantee says very little about whether that guarantee
existed in the first place—or, more relevant here, whether a
subsequent decision retroactively erased that guarantee.
Rather, an agency’s progress speaks to, if anything, the
existence and strength of any reliance interests—an issue we
have consistently analyzed under other doctrines, including
secondary retroactivity, e.g., Bd. of Cnty. Comm’rs of Weld

-- 16 of 51 --

17
DIRECTV is no outlier. We have iterated its basic holding
in similar contexts. In National Cable & Telecommunications
Ass’n v. FCC, for example, the FCC banned exclusivity
contracts between cable operators and multiple-dwelling units.
567 F.3d 659, 661–62 (D.C. Cir. 2009) (NCTA). It also
prohibited cable companies from enforcing existing exclusivity
contracts. Id. at 662. Petitioners argued that the FCC’s
decision to outlaw existing exclusivity contracts operated
retroactively. Id. at 670. We rejected that assertion, however,
concluding that the decision was not retroactive because it did
“not render[] past actions illegal or otherwise sanctionable,”
even if it “impaired the future value of past bargains.” Id.
Similarly, in Mobile Relay Associates v. FCC, we upheld
the FCC’s rebanding decision, in which it reconfigured a
portion of the radio band. 457 F.3d 1, 3 (D.C. Cir. 2006). One
petitioner argued that the FCC retroactively impaired the right
it had obtained at auction to operate a licensed radio system in
the future. Id. at 10. The petitioner equated the FCC’s decision
with selling a “10-year timber” lease, “collecting the ten years
of rent in advance, and then, one year into the ten-year term,”
prohibiting timber extraction. Pet’r’s Br. at 31–32, Mobile
Relay Assocs., 457 F.3d 1 (No. 04-1413). We declined to set
aside the decision as retroactive, holding that its effects were
“purely prospective” even if they unsettled the petitioner’s
reliance interests. Mobile Relay Assocs., 457 F.3d at 11. We
also observed that an order “is not retroactive” if it “alters the
Cnty. v. Env’t Prot. Agency, 72 F.4th 284, 295–96 (D.C. Cir.
2023), and the Administrative Procedure Act’s arbitrary-and-
capricious standard, e.g., MediNatura, Inc. v. Food & Drug
Admin., 998 F.3d 931, 940–41 (D.C. Cir. 2021).

-- 17 of 51 --

18
future effect” but “not the past legal consequences of an
action.” Id. (citation modified).3
Consistent with this understanding of retroactivity, we see
nothing impermissibly retroactive about FERC’s decision.
Affirmed reasonably expected that it would be allowed to bid
in at least two more auctions. But that expectation did not
transform FERC’s forward-looking orders into retroactive
ratemaking. An order that merely “upsets expectations based
on prior law is not retroactive.” NCTA, 567 F.3d at 670
(quoting Mobile Relay Assocs., 457 F.3d at 11). Nor is an order
that simply “alters the future effect” of a party’s conduct.
Mobile Relay Assocs., 457 F.3d at 11. FERC’s orders
undoubtedly altered Affirmed’s eligibility for future
auctions—a “future effect,” as Mobile Relay put it. Id. But
that is all they did. They did not strip Affirmed of its “past
eligibility.” Ass’n of Accredited Cosmetology Schs. v.
Alexander, 979 F.2d 859, 864 (D.C. Cir. 1992). They did not
force Affirmed to return the “payments [it] had received” from
earlier auctions. 4 Id. And they did not render Affirmed’s “past
3 There is nothing unique about the broadcast or
communications fields that would preclude us from applying
these cases to define retroactivity. Many of our foundational
cases in this context drew guidance from FCC precedent in
defining retroactivity. E.g., City of Piqua, 610 F.2d at 954
(quoting Nader, 520 F.2d at 202); Pub. Serv. Co., 600 F.2d at
957 (same). And we have observed that, as a general matter,
courts apply the filed-rate doctrine “across the spectrum of
regulated utilities.” NSTAR Elec. & Gas Corp. v. FERC, 481
F.3d 794, 800 (D.C. Cir. 2007) (quotation omitted).
4 This is one of the reasons that we find unpersuasive the
partial dissent’s reliance on Arkema Inc. v. Environmental
Protection Agency, 618 F.3d 1 (D.C. Cir. 2010). The Arkema

-- 18 of 51 --

19
actions illegal or otherwise sanctionable.” NCTA, 567 F.3d at
670. They were therefore not retroactive.
Fortifying this conclusion, Section L.4 is “itself entirely
prospective.” DIRECTV, 110 F.3d at 826. The provision “set
forth what [PJM] intended to do” once a provider’s bid cleared
at an auction. Id. But the occurrence of that condition did not
create regulatory gridlock—not even, as Affirmed claims, for
two more capacity auctions. Id. “To conclude otherwise would
hamstring” FERC in exercising its statutory prerogative to
accept just and reasonable tariffs. Mobile Relay Assocs., 457
F.3d at 11. Because FERC’s orders are not retroactive under
our caselaw, they do not violate the rule against retroactive
ratemaking.
The partial dissent challenges our reliance on FCC caselaw
in defining retroactivity, contending that it is crucial to pay
careful attention to the underlying statute—here, the FPA.
Partial Dissenting Op. 13, 17. We agree: The critical question
is whether FERC violated the FPA’s rule permitting only
prospective changes to the filed rate.5 But to answer that
Court made clear that the agency’s 2010 rule was retroactive
because it allowed the agency to undo transactions that were
completed in 2008 and 2009. 618 F.3d at 7, 10. Laws that
nullify past transactions are quintessentially retroactive. See
Landgraf, 511 U.S. at 268–69, 280. Here, by contrast,
Affirmed will keep all of the payments it received from the
2023/24 and 2024/25 delivery-year auctions. See Order, 189
FERC ¶ 61,095, P 72.
5 No one—not Affirmed, not us and not the partial
dissent—has identified a more specific, text-based rule that
FERC could have violated here.

-- 19 of 51 --

20
question, it is first necessary to define “retroactivity,” which is
why we draw guidance from caselaw on that matter.
Moreover, we cannot help but point out that the partial
dissent’s precedent of choice, Arkema Inc. v. Environmental
Protection Agency, 618 F.3d 1 (D.C. Cir. 2010), has nothing to
do with either the FPA or the filed-rate doctrine. See Partial
Dissenting Op. 17–18. Arkema instead involved an
Environmental Protection Agency (EPA) rulemaking; the
effective bar on retroactivity there arose from the Clean Air
Act, 42 U.S.C. § 7671f, together with the Supreme Court’s
“clear statement” rule from Bowen v. Georgetown University
Hospital, 488 U.S. 204, 208 (1988). Arkema, 618 F.3d at 7.
Why those sources should be more analogous to the FPA than
the FCC sources eludes us.
At bottom, we agree with the partial dissent that it can be
difficult to parse “the difference between a ‘past entitlement’
and a mere ‘expectation.’” Partial Dissenting Op. 12. Despite
our dissenting colleague’s undeniable thoroughness and
eloquence, however, we remain convinced that this petition
calls for nothing more than a straightforward application of
precedent.
B.
Next, Affirmed argues that FERC’s orders are arbitrary
and capricious because FERC failed to critically evaluate
PJM’s load forecast. Because that forecast provided the basis
of PJM’s filing, Affirmed asserts, FERC had to—but did not—
either critically review PJM’s analysis or conduct its own.
If an agency relies on a regulated party’s analysis to justify
its decision, it must either critically review that analysis or
perform its own. Susquehanna Int’l Grp., 866 F.3d at 447.

-- 20 of 51 --

21
“[U]nquestioning reliance” on the submission does not suffice.
Bloomberg L.P. v. Sec. & Exch. Comm’n, 45 F.4th 462, 473
(D.C. Cir. 2022) (quoting Susquehanna Int’l Grp., 866 F.3d at
447). Nor may an agency “simply summarize[]” the party’s
argument “in broad strokes” and then “announce” that it is
persuaded. In re NTE Conn., LLC, 26 F.4th 980, 988 (D.C. Cir.
2022). Instead, if the agency decides not to perform its own
analysis, it must “adopt” the party’s submission and “explain[]
why” it finds the submission “persuasive.” Cboe Futures
Exch., LLC v. Sec. & Exch. Comm’n, 77 F.4th 971, 979 (D.C.
Cir. 2023) (citation modified).
Here, FERC critically reviewed PJM’s load forecast and
explained why it found the submission persuasive. FERC
acknowledged that there would “inevitably” be some daylight
between PJM’s load forecast and the actual effects of EERs on
electrical consumption. Order, 189 FERC ¶ 61,095, P 69. But
it determined that the forecast could reasonably capture those
effects, for several reasons.6
First, the forecast uses reliable data. Order, 189 FERC
¶ 61,095, P 69; Rehearing Order, 190 FERC ¶ 61,081, P 32.
As FERC explained, the forecast incorporates data from
multiple sources, including “publicly available data” from the
EIA, a unit within the U.S. Department of Energy, whose data
are widely used in the industry. Order, 189 FERC ¶ 61,095,
P 69; accord Rehearing Order, 190 FERC ¶ 61,081, PP 32–33.
PJM then supplements the EIA data with data acquired from
6 For some of its discussion, FERC incorporated by
reference portions of the manager’s affidavit, as it was entitled
to do. Christian Broad. Network, Inc. v. Copyright Royalty
Tribunal, 720 F.2d 1295, 1306 (D.C. Cir. 1983); see Colo.
Interstate Gas Co. v. Fed. Power Comm’n, 324 U.S. 581, 595
(1945).

-- 21 of 51 --

22
other sources. Order, 189 FERC ¶ 61,095, P 69; Rehearing
Order, 190 FERC ¶ 61,081, PP 32–33. These additional data
encompass variables like historical weather patterns, behind-
the-meter battery use, electric-vehicle charging, solar-energy
use and data-center activity. See Rehearing Order, 190 FERC
¶ 61,081, P 32 nn.83–84 (citing, inter alia, Gledhill Aff. ¶¶ 10,
13–15). The reliability of these data, FERC determined,
weighed in favor of finding the forecast reliable. Order, 189
FERC ¶ 61,095, P 69; Rehearing Order, 190 FERC ¶ 61,081,
P 32.
Second, the forecast employs a plausible mechanism to
capture EERs without the four-year lag. PJM incorporates end-
use intensity values, FERC explained, which track a
technology’s use over time and its efficiency. Rehearing
Order, 190 FERC ¶ 61,081, P 32 & n.85 (citing Gledhill Aff.
¶¶ 16–23). In other words, the values project “growing
efficiency,” meaning the greater the impact of an EER project,
the “lower the end-use intensity.” J.A. 121, Gledhill Aff.
¶¶ 20–21. FERC recognized that these values helped close the
gap between the date EER projects become operational and
when the projects are reflected in the forecast. Order, 189
FERC ¶ 61,095, PP 62, 65; Rehearing Order, 190 FERC
¶ 61,081, P 32.
Third, PJM refines its model on the basis of feedback from
shareholders and outside consultants. Order, 189 FERC
¶ 61,095, P 69 & n.163 (citing Gledhill Aff. ¶¶ 6–11). Various
groups within PJM periodically review the load forecast,
including its Load Analysis Subcommittee and Planning
Committee. J.A. 119, Gledhill Aff. ¶ 10. PJM also
commissioned a publicly available report from outside
consultant Itron, Inc. J.A. 119, Gledhill Aff. ¶ 11. And after
Itron published its report, it met with the Load Analysis
Subcommittee to evaluate the forecast. J.A. 119, Gledhill Aff.

-- 22 of 51 --

23
¶ 11. In FERC’s view, these expert consultations also weighed
in favor of crediting the forecast. Order, 189 FERC ¶ 61,095,
P 69; Rehearing Order, 190 FERC ¶ 61,081, P 32.
Fourth, other metrics confirmed that the forecast did not
significantly underestimate the effects of EERs. Rehearing
Order, 190 FERC ¶ 61,081, P 33 & n.91 (citing Gledhill Aff.
¶¶ 33–34). The relationship between recent load forecasts on
the one hand and the observed load and short-term forecast on
the other corroborated the load forecast’s reliability, FERC
concluded. Id. P 33 n.91 (citing Gledhill Aff. ¶¶ 33–34). As
PJM’s manager had explained, those relationships would have
flipped if the model had seriously underestimated the effects of
EERs. J.A. 124–25, Gledhill Aff. ¶¶ 33–34. Weighing all of
this evidence, FERC determined that “PJM’s improved load
forecast reasonably accounts for energy efficiency measures.”
Rehearing Order, 190 FERC ¶ 61,081, P 31.
We believe FERC met its duty to critically review PJM’s
submission. It carefully described the submission and
explained why the submission was suitable for its intended
purpose. Far from “rubberstamp[ing]” PJM’s analysis, FERC
fully explained why it “found [that] evidence persuasive.” In
re NTE Conn., 26 F.4th at 988. Measured against our
deferential standard of review, FERC’s analysis was, we
believe, more than satisfactory.
Affirmed, however, emphasizes that FERC did not have
access to the statistical methodology underlying PJM’s load
forecast and so it questions FERC’s ability to evaluate
accurately the forecast. Affirmed mistakes the level of
granularity that our caselaw imposes. “There is no support” for
the assertion that an “untested” and “uncorroborated” affidavit
“cannot constitute substantial evidence.” EchoStar Commc’ns
Corp. v. FCC, 292 F.3d 749, 753 (D.C. Cir. 2002); see also

-- 23 of 51 --

24
Ass’n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors
of Fed. Rsrv. Sys., 745 F.2d 677, 683–84 (D.C. Cir. 1984)
(“When the arbitrary or capricious standard is performing that
function of assuring factual support, there is no substantive
difference between what it requires and what would be required
by the substantial evidence test . . . .”). Tellingly, it cites no
precedent in which we have required a regulated party to
disclose an underlying statistical model before the agency can
adopt the party’s analysis. And Affirmed’s objection is
especially inapt where, as here, PJM has commissioned a
publicly available report on its methodology and has provided
a detailed affidavit discussing how that methodology works.
See Am. Whitewater v. FERC, 125 F.4th 1139, 1153 (D.C. Cir.
2025) (“Absent evidence to the contrary, FERC was entitled to
rely on representations by parties who were uniquely in a
position to know the relevant information.” (citation
modified)).
Affirmed also contends that FERC failed to grapple with
several aspects of the EIA’s data that rendered the data
unsuitable for the load forecast. For example, Affirmed alleges
that the EIA fails to account for certain kinds of EERs,
overestimates energy consumption and has warned against
using its analyses as a forecast. Even if Affirmed is right on
the facts, the EIA data were, as FERC noted, just “one input”
for a model that, on the whole, it found reliable. Rehearing
Order, 190 FERC ¶ 61,081, P 33. And it acknowledged that
the load forecast might not perfectly capture EERs’ expected
effects. Order, 189 FERC ¶ 61,095, P 69. But because load
forecasting is “inherently uncertain” and PJM’s proposal cut
costs without sacrificing reliability, FERC concluded that PJM
had adequately supported its proposal. Rehearing Order, 190
FERC ¶ 61,081, PP 33–34. We find nothing unreasoned in that
explanation.

-- 24 of 51 --

25
Finally, Affirmed highlights that FERC framed many of
its observations in the third person—“PJM described,” or “PJM
explained.” Pet’r’s Br. 45 (citation modified). In Affirmed’s
view, this language calls into question whether FERC in fact
adopted PJM’s submission as its own or simply summarized
PJM’s arguments. We disagree. FERC most probably
employed the third person as acknowledging that PJM carried
the burden of showing its proposal was just and reasonable.
See 16 U.S.C. § 824d(e); City of Winnfield v. FERC, 744 F.2d
871, 877 (D.C. Cir. 1984). Its analysis confirms that
understanding. In describing the evidence supporting the
forecast, FERC stated, “We also . . . find that PJM has met its
burden to show that its proposal will result in just and
reasonable rates” and that the “forecast reasonably accounts
for” EERs. Rehearing Order, 190 FERC ¶ 61,081, P 31;
accord id. P 33.
C.
Affirmed also asserts that FERC failed to consider an
important aspect of the problem before it—namely, the benefits
of EER participation. Affirmed maintains that EER providers
use the revenue they receive from capacity auctions to further
incentivize the production and sale of EERs. The loss of that
revenue, Affirmed says, will diminish EER growth as a matter
of “economics 101.” Pet’r’s Br. 48. Yet, it contends, FERC
entirely ignored this consequence of its decision.
It is well settled that an agency’s action is arbitrary and
capricious if it “entirely fail[s] to consider an important aspect
of the problem” before it. Motor Vehicle Mfrs. Ass’n of U.S.,
Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983);
accord Ohio v. EPA, 603 U.S. 279, 293 (2024) (“An agency
cannot simply ignore an important aspect of the problem.”
(citation modified)). The agency may, however, recognize a

-- 25 of 51 --

26
problem but conclude that the problem is mitigated, or its costs
outweighed, by other considerations. Pub. Citizen v. Fed.
Motor Carrier Safety Admin., 374 F.3d 1209, 1217 (D.C. Cir.
2004).
We conclude that FERC has met this standard. FERC
acknowledged that its decision could reduce the incentives to
invest in EER projects. It also noted that “providing capacity
payments” for EERs “may increase incentives to invest” in
EERs but that those incentives were not “necessary to ensure
just and reasonable rates in PJM.” Order, 189 FERC ¶ 61,095,
P 70. PJM would continue to capture EERs “on the demand
side,” FERC emphasized, thereby reducing both the resource
requirement and the corresponding capacity payments. Id.
FERC was thus aware of and considered any blunting of
incentives. Baystate Franklin Med. Ctr. v. Azar, 950 F.3d 84,
91 (D.C. Cir. 2020). But FERC properly “face[d] the trade-
off” inherent in its decision and determined that “the trade-off
was worth it.” Competitive Enter. Inst. v. Nat’l Highway
Traffic Safety Admin., 956 F.2d 321, 323–24 (D.C. Cir. 1992)
(emphasis omitted). In so doing, it balanced conflicting factors
as it is sometimes required to do in enforcing the FPA. See
Belmont Mun. Light Dep’t v. FERC, 38 F.4th 173, 184 (D.C.
Cir. 2022).
In a variation on the same theme, Affirmed maintains that
FERC’s response was internally inconsistent. See World
Shipping Council v. Fed. Mar. Comm’n, 152 F.4th 215, 221
(D.C. Cir. 2025) (An agency’s decision is unreasoned if it is
“internally inconsistent.” (quotation omitted)). Affirmed
highlights three statements that, in its view, are inconsistent.
First, FERC disclaimed reliance on PJM’s theory that there was
no relationship between capacity payments and EER
investment. Second, FERC recognized that capacity payments
might incentivize investment in EERs. Third, FERC

-- 26 of 51 --

27
determined that the amendment would not undercut grid
reliability.
These statements are not inconsistent. In the first, FERC
meant to qualm any fears that it had adopted PJM’s position
that there was no relationship between the proliferation of
EERs and capacity payments. Order, 189 FERC ¶ 61,095,
P 27. PJM had, after all, argued that “the proliferation of
energy efficiency projects in the PJM Region is entirely
unrelated to capacity payments.” J.A. 38 (emphasis added).
Picking up on that theme, protestors argued that PJM’s
proposal unfairly imposed a “strict causation standard” on them
alone. Order, 189 FERC ¶ 61,095, P 27. For example, one
protestor contended that PJM required it to “somehow
demonstrate” that it “caused” a customer to purchase an EER
product and that its receipt of capacity payments was “the
reason” for the purchase.7 Protest of Advanced Energy
Management Alliance, FERC Dkt. ER 24-2995, at 18 (Sep. 27,
2024). FERC rejected that implication. Instead, it clarified that
its decision did “not depend on [PJM’s] assertions [about] the
link between capacity market payments and [EER]
investments.” Order, 189 FERC ¶ 61,095, P 66 n.149. In other
words, FERC declined to accept PJM’s hardline stance that
there was no relationship at all between capacity payments and
EER investment. That position, however, is perfectly
consistent with FERC’s comment that capacity payments
might incentivize EER investment.
7 Because only Affirmed petitioned for rehearing, we of
course do not review the substance of the other protestors’
arguments. 16 U.S.C. § 825l(a). We consider those arguments
only to contextualize the statements that Affirmed alleges are
inconsistent.

-- 27 of 51 --

28
The third statement is also consistent with FERC’s other
positions. FERC recognized the potential incentive effect of
capacity payments for EERs. But it does not follow that
removing that incentive would necessarily outweigh the
benefits of the tariff amendment or render the grid unreliable.
As Affirmed itself points out, FERC believed the amendment
would not undermine grid reliability. There is no statement in
the orders to the contrary. FERC iterated time and again that
the amendment would lower costs without compromising grid
reliability. See, e.g., Order, 189 FERC ¶ 61,095, PP 63, 72;
Rehearing Order, 190 FERC ¶ 61,081, P 34. Affirmed might
disagree with FERC’s prediction but its disagreement does not
render FERC’s orders internally inconsistent.
Affirmed also contends that FERC failed to recognize and
explain its change of position from 2009. At the time, FERC
opined that EERs were a “critical part” of the energy market.
2009 Order, 126 FERC ¶ 61,275, P 130. Now, by sanctioning
PJM’s attempt to exclude EER providers, FERC has, Affirmed
argues, done a volte face. We reject this contention as well.
Without opining on the merits of the claim, we note that
Affirmed did not include the claim in its request for rehearing
and so it is forfeit. See 16 U.S.C. § 825l; Ameren Servs. Co. v.
FERC, 893 F.3d 786, 793 (D.C. Cir. 2018) (discussing the
FPA’s “unusually strict exhaustion requirement” (citation
modified)).
D.
Finally, Affirmed argues that FERC overlooked its
reliance interests. Providers like Affirmed structured their
business models around capacity payments, it asserts. And
Affirmed had invested $50 million in EERs that it planned to
bid at the 2026/27 and 2027/28 delivery-year auctions. In
Affirmed’s view, FERC failed to contend with the fact that its

-- 28 of 51 --

29
decision erased Affirmed’s existing investments and its
business model.
The governing legal principles are not in dispute. An
agency is not precluded from changing its position. FCC v.
Fox Television Stations, Inc., 556 U.S. 502, 514–15 (2009).
But when it does, it must “assess whether there [are] reliance
interests, determine whether they [are] significant, and weigh
any such interests against competing policy concerns.”
Regents, 591 U.S. at 33. Put another way, an agency must be
“cognizant” of the reliance interests its decision might upset
and “explain[] its good reasons” for moving forward anyway.
MediNatura, Inc. v. Food & Drug Admin., 998 F.3d 931, 943
(D.C. Cir. 2021) (citation modified). It falls to the agency to
decide whether any reliance interests are outweighed by other
factors. Regents, 591 U.S. at 32.
Viewed through this lens, FERC’s decision was
reasonable and, hence, permissible. FERC recognized the
reliance interests at stake, weighed their significance and
reasonably concluded that any harm to those interests was
outweighed by other considerations. See Cap. Power Corp. v.
FERC, 156 F.4th 644, 650 (D.C. Cir. 2025).
First, FERC acknowledged that its decision might
undermine existing reliance interests. It noted that providers
might have expected that their EERs would be eligible for four
years when deciding to invest. Order, 189 FERC ¶ 61,095,
P 72. But in its view, several factors diminished the gravity of
those reliance interests. The tariff did not grant providers an
entitlement that PJM could not change moving forward. Id.
The tariff also did not guarantee that any EER would clear at
the auction and thus generate revenue for the provider. Id. And
Section L.1 tempered the reliance interests, FERC explained,
because it expressly tied eligibility to PJM’s load forecast and

-- 29 of 51 --

30
thereby put EER providers on notice that EERs’ eligibility
might end. Rehearing Order, 190 FERC ¶ 61,081, P 38. In
addition, PJM intended to honor existing capacity obligations,
it noted, ensuring that providers received some return on their
investments. Order, 189 FERC ¶ 61,095, P 72. Finally, FERC
concluded that the record did not disclose the extent to which
providers had already recouped their investments. Id. FERC
emphasized, for example, that Affirmed did not disclose how
much, if not all, of its $50 million outlay it had already
recovered. Rehearing Order, 190 FERC ¶ 61,081, P 51.
Having appraised the reliance interests at stake, FERC
explained why its decision was nonetheless reasonable. FERC
determined that PJM’s proposal would produce “a more
efficient capacity market” by reducing the reliability
requirement and, hence, the capacity payments ultimately
borne by consumers. Order, 189 FERC ¶ 61,095, P 72. And it
would do this without compromising grid reliability. Id. FERC
concluded that these benefits “outweigh[ed] the possible harm”
its decision might cause. Id. It highlighted several
considerations that diminished the weight of the reliance
interests. See MediNatura, 998 F.3d at 942–43 (analyzing
factors that diminished or overcame reliance interests). And it
underscored that PJM would continue to honor existing
capacity commitments, which meant that providers’
investments would not be rendered worthless. Where, as here,
the agency has recognized and reasonably balanced the reliance
interests at stake, we do not replace its judgment with our own.
Regents, 591 U.S. at 32; see NCTA, 567 F.3d at 671.
Affirmed contends that FERC missed the mark when it
weighed the amendment’s prospectiveness, as well as the lack
of any clearing guarantee, in appraising its reliance interests.
In Affirmed’s view, these points did not answer its argument
that it had reasonably relied on Section L.4 for the right to

-- 30 of 51 --

31
participate in at least two more capacity auctions. Affirmed
misconceives FERC’s analysis. FERC expressly
acknowledged that providers like Affirmed may have expected
that their EERs would be eligible for four consecutive capacity
auctions. Order, 189 FERC ¶ 61,095, P 72. It considered the
amendment’s prospective nature and the lack of any clearing
guarantee for a different reason—“to properly define the scope
of the reliance interests at stake.” Rehearing Order, 190 FERC
¶ 61,081, P 37. In FERC’s view, these factors diminished the
interests’ significance, permitting it to conclude that they were
outweighed by other considerations.
Affirmed also maintains that FERC unreasonably
discounted its $50 million investment in EER projects that it
intended to bid at the 2026/27 and 2027/28 delivery-year
auctions. It repeatedly highlighted those sunk investments
before the agency, Affirmed asserts, but FERC nonetheless
faulted it for failing to show the extent to which FERC’s
decision would thwart its expectations, or how much of the $50
million it had already recouped. FERC permissibly counted
that lack of evidence against Affirmed. Once it had determined
that PJM showed the amendment was just and reasonable—a
determination that Affirmed has not challenged—FERC
reasonably faulted Affirmed for failing to respond with
persuasive rebuttal evidence. Evergy Kan. Cent., Inc. v. FERC,
77 F.4th 1050, 1056 (D.C. Cir. 2023). It noted that the record
did not reflect the degree to which the amendment would
thwart existing investments. Order, 189 FERC ¶ 61,095, P 72.
It did not dispute that Affirmed had invested in EERs but it
observed that Affirmed had not stated whether it had already
recouped its investment. Rehearing Order, 190 FERC
¶ 61,081, P 51. Recoupment was no remote possibility: EER
providers received more than $140 million in capacity
payments for the 2025/26 delivery year alone. Id. P 50 n.163.
And the projects that Affirmed planned to bid at the 2026/27

-- 31 of 51 --

32
and 2027/28 delivery-year auctions had already cleared at least
one auction, generating some revenue for Affirmed. FERC
permissibly weighed this lack of evidence when considering
the reliance interests at stake.
* * *
For the foregoing reasons, the petition for review is denied.
So ordered.

-- 32 of 51 --

P AN , Circuit Judge, dissenting in part:
PJM Interconnection, LLC (“PJM”) is a regional
transmission organization that manages the wholesale market
for electricity in the Mid-Atlantic and Midwestern regions of
the United States. PJM conducts auctions to ensure adequate
electricity capacity to meet demand. Its auction procedures are
governed by a tariff that the Federal Energy Regulatory
Commission (“FERC” or the “Commission”) must approve.
In 2009, PJM amended its tariff to authorize suppliers of
Energy Efficiency Resources (“EERs”) to participate in its
capacity auctions. To incentivize EER bidding, the tariff
guaranteed that if an EER “cleared” an auction (i.e., if the bid
were accepted), it could also be offered in the next three
auctions. Although previously cleared EERs were not assured
of clearance in the subsequent auctions, the opportunity for the
EER providers to participate was valuable: So long as the
subsequent bids were low enough, the EERs would “clear”
those auctions too and thus would generate additional
payments to the providers. EER providers factored that
possibility into their pricing of energy-efficiency projects and
into their bidding strategies in auctions.
Under the multi-year eligibility rule, the clearing of an EER
in a PJM capacity auction was a legally significant event: The
initial clearance conferred on the EER’s purveyor an
entitlement to participate in the next three auctions. That
entitlement was protected by the filed-rate doctrine, which
constrains PJM’s ability to change its tariff, and the
retroactivity doctrine, which prohibits FERC from altering the
legal consequences arising out of a past action.
Affirmed Energy, LLC (“Affirmed”) is a provider of EERs
in PJM’s region. Affirmed’s EERs cleared PJM’s auctions for
the 2023/24 and 2024/25 delivery years. It therefore was
entitled to bid those EERs in the 2026/27 and 2027/28 delivery-

-- 33 of 51 --

2
year auctions. But before that could happen, PJM amended its
tariff in 2024 to bar EERs from all auctions, effectively
changing the filed rate on which Affirmed relied, and
retroactively stripping Affirmed of an entitlement that the tariff
had conferred. Because I disagree with my colleagues’
conclusion that the 2024 tariff amendment did not retroactively
alter Affirmed’s eligibility to bid its EERs in specific future
auctions, I respectfully dissent from Section II.A of the court’s
opinion. I join the court’s holding that the 2024 amendment
was not otherwise arbitrary and capricious.
I. Background
The Federal Power Act (“FPA” or the “Act”) grants FERC
the authority to regulate “the transmission of electric energy in
interstate commerce” and “the sale of electric energy at
wholesale in interstate commerce.” 16 U.S.C. § 824(b)(1).
The Act charges the Commission with ensuring that electricity
rates — including all “rules and regulations affecting or
pertaining to such rates” — are “just and reasonable” and not
“undu[ly] prejudic[ial].” Id. § 824d(a)–(b). Regulated entities
that manage the transmission and sale of electricity must file
with FERC “schedules showing all rates and charges for any
transmission or sale . . . and the classifications, practices, and
regulations affecting such rates and charges.” Id. § 824d(c).
FERC must publish those proposed rates and regulations. Id.
Once filed, a rate cannot be changed without following notice-
and-comment procedures. Id. § 824d(d) (“[N]o change shall
be made . . . in any such rate, charge, classification, or service,
or in any rule, regulation, or contract relating thereto, except
after sixty days’ notice to the Commission and to the public.”);
id. § 824d(e) (allowing third parties to submit protests
challenging proposed rates and rules). FERC may change
unjust and unreasonable rates and rules, but it may do so only
prospectively. Id. § 824e(a); see also Okla. Gas & Elec. Co. v.

-- 34 of 51 --

3
FERC, 11 F.4th 821, 829 (D.C. Cir. 2021) (“FERC has no
authority under the Act to allow retroactive change in the filed
rates.” (cleaned up)).
To carry out its statutory duties, FERC has tasked regional
transmission organizations (“RTOs”) with coordinating the
transmission of electricity and managing the wholesale markets
within their respective regions. FERC v. Elec. Power Supply
Ass’n, 577 U.S. 260, 267 (2016). PJM is one such RTO. At
least once a year, PJM administers competitive auctions to
procure capacity from electricity-generating suppliers.
“Capacity is not actual electricity,” but rather “a commitment
to produce electricity or forgo the consumption of electricity”
in a future delivery year. Advanced Energy Mgmt. All. v.
FERC, 860 F.3d 656, 659 (D.C. Cir. 2017). Because capacity
“auctions determine the wholesale rates of energy in interstate
commerce, they are subject to Commission oversight.” XO
Energy MA, LP v. FERC, 77 F.4th 710, 714 (D.C. Cir. 2023).
PJM therefore must file with FERC a tariff that sets forth the
governing rules for its capacity auctions. Id.; 16
U.S.C. § 824d(c).
In PJM’s capacity auctions, suppliers bid the price they are
willing to accept in exchange for committing to provide
electricity in a future delivery year. PJM accepts or “clears”
bids starting with the lowest rate that is offered until it has
procured enough capacity to meet its projected
demand — commonly referred to as its projected “load.” All
accepted bids receive the highest accepted rate, known as the
“clearing price.” Hughes v. Talen Energy Mktg., LLC, 578
U.S. 150, 156 (2016). PJM typically administers its auctions
three years before the target delivery year. In doing so, it relies
on a “load forecast” model to predict “the amount of capacity
that needs to be procured” for that delivery year. J.A. 118
(Gledhill Aff. ¶ 5).

-- 35 of 51 --

4
In 2009, FERC approved a PJM tariff that authorized EER
providers to bid the projected energy savings from their
resources as capacity in PJM’s auctions. PJM Interconnection,
LLC, 126 FERC ¶ 61,275 at P 130 (2009) (the “2009 Order”).
Under that 2009 tariff, EERs played a unique role in PJM’s
capacity market. Unlike power-generating suppliers that
commit to producing electricity, EER suppliers — like
Affirmed — commit to reducing energy consumption in PJM’s
region.
Affirmed contracts with manufacturers, retailers, and
distributors of energy-efficient products to provide per-unit
compensation for each energy-efficient product that is sold. In
exchange, the program partners give Affirmed “the contractual
rights to the capacity reductions from those energy[-]efficient
products.” Affirmed Add. 10 (Abram Decl. ¶ 6). Those
capacity reductions comprise the EERs that Affirmed bids at a
capacity auction. The payments that Affirmed makes to its
program partners for the sale of energy-efficient products
incentivize the partners to increase their sales of such products.
If Affirmed’s EERs clear at the capacity auction, Affirmed
receives the clearance price from PJM. The dollar amounts at
issue are significant: In PJM’s auction for the 2024/25 delivery
year, EER suppliers like Affirmed received more than $100
million in revenue for cleared EER bids.
The instant petition for review concerns, in relevant part,
Section L.4 of PJM’s 2009 tariff. Section L.4 provides that an
EER that clears a capacity auction may be offered in the next
three consecutive auctions:
[An] Energy Efficiency Resource that clears
an auction for a Delivery Year may be
offered in auctions for up to three additional

-- 36 of 51 --

5
consecutive Delivery Years, but shall not be
assured of clearing in any such auction . . . .
J.A. 61.1
In its 2009 Order approving PJM’s tariff, FERC confirmed
that “PJM’s proposal would allow an [energy-efficient]
resource to bid into the auction, and if it is accepted, to bid for
an additional three consecutive years.” 126 FERC ¶ 61,275 at
P 131. FERC’s approval of that provision rested on two policy
considerations. First, as the majority explains, PJM adopted
the multiple-auction rule to address the four-year lag between
when consumers installed energy-efficient products and when
PJM’s load forecast model accounted for the corresponding
reduction in energy demand. Id. at P 132. Second, FERC also
approved the tariff provision to make it more likely that EER
suppliers would receive additional payments for their positive
contributions. Unlike power generators that produce electricity
each year, energy-efficient products continuously reduce
energy demand and capacity needs in PJM’s region over time.
1 Another provision of the 2009 tariff, Section L.1, defines an
EER as follows:
An Energy Efficiency Resource is a project . . .
designed to achieve a continuous . . . reduction in
electric energy consumption at the end-use
customer’s retail site that is not reflected in the
peak load forecast prepared for the Delivery Year
for which the Energy Efficiency Resource is
proposed, and that is fully implemented at all
times during such Delivery Year, without any
requirement of notice, dispatch, or operator
intervention.
J.A. 60.

-- 37 of 51 --

6
Consider, for example, a consumer who has installed an
energy-efficient refrigerator in her home. That refrigerator will
continuously reduce the homeowner’s energy consumption
over multiple years and, as a result, will lower the expected
energy demand that PJM’s capacity auction must meet. When
FERC approved the participation of EERs in PJM’s auctions,
it expressly acknowledged that “energy efficiency is a
permanent reduction in load . . . .” Id. at P 136. Section L.4
was intended to “allow energy efficiency resources that clear
in [an] auction to receive . . . capacity payments for up to four
consecutive Delivery Years.” Id. at P 121. That benefit to EER
suppliers reflected FERC’s view that EER projects served “a
critical part of efficient energy markets, and should be treated
comparably to other types of resources, by being allowed to
participate in base residual auctions and be paid the auction
clearing price when they are accepted in the auction.” Id. at
P 130.
Since 2014, Affirmed has bid its EERs in nearly thirty
auctions. In preparation for the auctions, Affirmed
“calculate[d] and aggregate[d] the expected future energy
capacity reductions” from its energy-efficiency projects and, in
turn, bid those capacity reductions in PJM’s auctions.
Affirmed Add. 10 (Abram Decl. ¶ 7). PJM reviewed and
approved Affirmed’s calculation “methodologies” to verify
that its energy-efficiency projects had, in fact, reduced the
expected capacity load. Id.; see also 2009 Order, 126 FERC
¶ 61,275 at P 121.
From 2022 to 2024, Affirmed invested $50 million to
incentivize the purchase and installation of energy-efficient
products, and to acquire the contractual rights to the attendant
capacity reductions. Affirmed then bid the energy savings
from those products in PJM’s auctions for the 2023/24 and
2024/25 delivery years. Affirmed’s EERs cleared both

-- 38 of 51 --

7
auctions. As a result, the operative tariff guaranteed Affirmed
the opportunity to bid the continued energy savings from those
EERs in PJM’s 2025/26, 2026/27, and 2027/28 delivery-year
auctions.
But before Affirmed could bid its EERs in the 2026/27 and
2027/28 delivery-year auctions, PJM changed course. In 2024,
PJM proposed a tariff amendment that barred EERs from its
capacity auctions altogether. Specifically, its 2024 amendment
declared that “no Energy Efficiency Resources shall qualify to
be offered into the [capacity] Auctions beginning with the
2026/2027 Delivery Year.” J.A. 94. The proposed amendment
rendered Affirmed ineligible to bid its EERs in the 2026/27 and
2027/28 delivery-year auctions, even though its EERs had
cleared the 2023/24 and 2024/25 delivery-year auctions.2
Affirmed submitted a protest opposing PJM’s 2024 tariff
amendment. In relevant part, Affirmed argued that because its
EERs cleared the 2023/24 and 2024/25 delivery-year auctions,
Affirmed had secured the right to bid its EERs in up to three
additional consecutive capacity auctions, under the operative
tariff. Affirmed objected that PJM’s proposed tariff
amendment would divest Affirmed of its entitlement to bid its
EERs in the 2026/27 and 2027/28 delivery-year auctions.
FERC nevertheless approved the 2024 tariff amendment as
applied to Affirmed’s previously cleared EERs, concluding
that the original multi-year eligibility provision did not
2 PJM justified the change by explaining that its improved load
forecast model could now incorporate the expected energy savings
from energy-efficient products. As the majority explains, PJM was
entitled to change its policy regarding EERs, and its tariff
amendment was not arbitrary and capricious. I focus here on the
retroactive effects of the change on Affirmed’s right to participate in
future auctions after its EERs cleared the 2023/24 and 2024/25
delivery-year auctions.

-- 39 of 51 --

8
preclude PJM from implementing “forward-looking revisions
to Energy Efficiency Resources’ eligibility more broadly.”
PJM Interconnection, LLC, 189 FERC ¶ 61,095 at P 71 (2024).
II. The Filed-Rate and Retroactivity Doctrines
The Commission may adjust electricity rates and related
regulations only prospectively. This constraint on FERC’s
authority rests on two related principles: the filed-rate doctrine
and the rule against retroactive ratemaking. The filed-rate
doctrine is grounded in provisions of the Federal Power Act
that require regulated entities (like PJM) “to charge only the
rates filed with FERC and to change their rates only
prospectively.” Okla. Gas, 11 F.4th at 829. That statutory
prohibition on retroactive changes to the filed rate “is not
limited to ‘rates’ per se”; it also “extends to matters directly
affect[ing] . . . rates” — such as the EER auction-participation
rule at issue here. Id. (cleaned up) (quoting Nantahala Power
& Light Co. v. Thornburg, 476 U.S. 953, 966–67 (1986)). The
scope of the doctrine is consistent with the Act’s broad
language requiring regulated entities to publicly file proposed
changes in any “rate, charge, classification, or service, or in any
rule, regulation, or contract relating thereto.” 16
U.S.C. § 824d(d).
The rule against retroactive ratemaking is a “corollary” and
“logical outgrowth” of the filed-rate doctrine. SFPP, L.P. v.
FERC, 967 F.3d 788, 801, 802 (D.C. Cir. 2020). It generally
“prohibits the Commission from adjusting current rates to
make up for a utility’s over- or under-collection in prior
periods.” Old Dominion Elec. Coop. v. FERC, 892 F.3d 1223,
1227 (D.C. Cir. 2018).
Together, the “filed rate doctrine and the rule against
retroactive ratemaking leave the Commission no discretion to

-- 40 of 51 --

9
waive the operation of a filed rate or to retroactively change or
adjust a rate for good cause or for any other equitable
considerations.” Old Dominion Elec., 892 F.3d at 1230; see
also Okla. Gas, 11 F.4th at 829–30 (noting that the doctrines
are “nearly impenetrable shield[s]” that do “not yield, no matter
how compelling the equities”). Strict application of those
principles gives effect to Congress’s command for FERC to
ensure predictable and stable electricity rates. NSTAR Elec. &
Gas Corp. v. FERC, 481 F.3d 794, 800 (D.C. Cir. 2007); see
also PJM Power Providers Grp. v. FERC, 96 F.4th 390, 402
(3d Cir. 2024) (“FERC has no authority to disregard
Congress’s will” in achieving predictable auction rules.); cf.
Pub. Utilities Comm’n of Cal. v. FERC, 894 F.2d 1372, 1383
(D.C. Cir. 1990) (The Natural Gas Act’s ban on retroactive
ratemaking “reflects a congressional determination that parties
in the industry need to be able to rely on the finality of approved
rates, and that this interest outweighs the value of being able to
correct for decisions that in hindsight may appear unsound.”).
In evaluating the retroactivity of a tariff provision approved
by FERC, courts look to the Supreme Court’s decision in
Landgraf v. USI Film Products, 511 U.S. 244 (1994), for
guidance. See, e.g., PJM Power Providers, 96 F.4th at 398
(noting that the Federal Power Act does not define
“retroactivity” and drawing on Landgraf). Landgraf explains
that a law or regulation is retroactive if it “takes away or
impairs vested rights acquired under existing laws, or creates a
new obligation, imposes a new duty, or attaches a new
disability, in respect to transactions or considerations already
past.” 511 U.S. at 269 (cleaned up). A regulation does not
have retroactive effect “merely because it is applied in a case
arising from conduct antedating the [regulation’s]
enactment, . . . or upsets expectations based in prior law.” Id.
Rather, the critical question is whether the new provision
“attaches new legal consequences to events completed before

-- 41 of 51 --

10
its enactment.” Id. at 270; see also Bd. of Cnty. Comm’rs v.
EPA, 72 F.4th 284, 292–93 (D.C. Cir. 2023) (“[R]etroactive
rules alter the past legal consequences of past actions.”).
Landgraf instructs that the “conclusion that a particular rule
operates retroactively comes at the end of a process of
judgment concerning the nature and extent of the change in the
law and the degree of connection between the operation of the
new rule and a relevant past event.” 511 U.S. at 270 (cleaned
up). The analysis is therefore “fact-intensive,” Shambie
Singer, Sutherland Statutory Construction § 41:4 (8th ed.
2018), and informed by “familiar considerations of fair notice,
reasonable reliance, and settled expectations,” Landgraf, 511
U.S. at 270.
III. Analysis
In my view, PJM’s 2024 tariff amendment is impermissibly
retroactive and violates the filed-rate doctrine to the extent that
it strips Affirmed of its entitlement to bid its EERs in the
2026/27 and 2027/28 delivery-year auctions — an entitlement
that attached when Affirmed’s EERs cleared the 2023/24 and
2024/25 delivery-year auctions. Under Landgraf, the 2024
tariff amendment “takes away or impairs” Affirmed’s “vested
right” to bid in subsequent auctions, which was “acquired
under [the] existing [tariff].” 511 U.S. at 269 (cleaned up). The
amendment also “attaches a new disability . . . in respect to
transactions or considerations already past.” Id. The “past”
events were the 2023/24 and 2024/25 delivery-year auctions,
in which Affirmed earned the right to participate in subsequent
auctions by clearing its EERs.
Under Landgraf, the retroactivity analysis turns on whether
PJM’s pre-existing tariff attached a past legal consequence to a
past action. That inquiry begins with interpreting the tariff’s

-- 42 of 51 --

11
“plain meaning,” understood through both “its text and
context.” Okla. Gas, 11 F.4th at 827. The relevant tariff
provision here, Section L.4, plainly states that an EER that
“clears an auction for a Delivery Year may be offered in
auctions for up to three additional consecutive Delivery Years,
but shall not be assured of clearing in any such auction.” J.A.
61. The guarantee of three subsequent years of auction
participation is so clear that my colleagues in the majority “do
not doubt that under Section L.4’s plain meaning, Affirmed
obtained permission to bid at up to four consecutive auctions.”
Maj. Op. at 14.
Landgraf notes that the fact-intensive retroactivity analysis
is informed by “familiar considerations of fair notice,
reasonable reliance, and settled expectations.” 511 U.S. at 270.
Here, the multi-year participation provision in Section L.4 was
intended to provide an incentive for EER suppliers to
participate in PJM’s capacity auctions and to more accurately
account for the contributions of EERs to the electricity market.
Because EERs provide ongoing reductions in demand for
future delivery years, FERC determined that EER “providers
should have the ability to obtain the full economic benefits of
their investments” by participating in up to four auctions. 2009
Order, 126 FERC ¶ 61,275 at P 137. FERC’s 2009 Order and
the tariff itself thus set the expectation that EER suppliers
would be granted multi-year participation in capacity auctions
if their EERs cleared an initial auction. In other words, that
expectation was embodied in the filed rate.
The tariff’s multi-year auction provision, approved by the
2009 Order, drove Affirmed to substantially invest in EERs and
to bid them in the 2023/24 and 2024/25 delivery-year auctions.
In executing its business plan and formulating its bids,
Affirmed relied on Section L.4’s guarantee that if its EERs
cleared an auction, Affirmed would secure multi-year

-- 43 of 51 --

12
eligibility to offer the continued energy savings from those
EERs in three consecutive auctions. Critically, Affirmed
submitted EER bids that cleared the auctions for the 2023/24
and 2024/25 delivery years. Affirmed’s settled expectation at
the time of clearance was that it would be permitted to
participate in the next three capacity auctions.
Despite the plain meaning of Section L.4 and Affirmed’s
reliance on it, my colleagues in the majority conclude that the
2024 amendment that bars EERs from PJM’s capacity auctions
operates only prospectively in this case. Maj. Op. at 16–19.
They reason that the 2024 amendment does not disturb
Affirmed’s past entitlement but instead merely frustrates
Affirmed’s expectations of participating in future auctions. Id.
Although the difference between a “past entitlement” and a
mere “expectation” is not easy to parse, my colleagues do not
attempt to explain why they view the change to PJM’s tariff as
“prospective” as applied to Affirmed, when Affirmed’s right to
participate in future auctions ripened in the past — i.e., during
the auctions for the 2023/24 and 2024/25 delivery years.
As I see it, the key facts before us are that (1) Affirmed’s
right to bid its EERs in the 2026/27 and 2027/28 delivery-year
auctions vested when its EERs cleared the 2023/24 and
2024/25 delivery-year auctions; (2) the filed-rate doctrine
safeguards Affirmed’s reliance on Section L.4 of the operative
tariff, which PJM filed and FERC approved; and (3) the
prohibition against retroactive rate-making and general
principles of retroactivity further constrain the ability of PJM
and FERC to alter the tariff to the extent that it affects a “past
legal consequence” — here, the vesting of Affirmed’s rights
when its EERs cleared past auctions.
The cases cited by my colleagues in their analysis of the
retroactivity issue are factually and legally distinguishable.

-- 44 of 51 --

13
None of them addresses a situation where a change in
regulatory policy altered a past legal consequence — i.e.,
where a legal right was conferred on the petitioning party in the
past but was stripped away by the new rule. Instead, the
majority’s cited cases largely address circumstances where
companies made business decisions based on their
understanding of certain rules that later changed, thereby
upsetting the companies’ expectations. The critical distinction
here is that Affirmed’s EERs already cleared auctions for the
2023/24 and 2024/25 delivery years, and the operative tariff
guaranteed that Affirmed therefore would be entitled to bid
those EERs in the 2026/27 and 2027/28 delivery-year auctions.
The cases cited by the majority would be more on point if
Affirmed had not cleared any auctions in the past but argued
that it should be allowed to participate in the next auction
because it had invested time and money to prepare a bid in
reliance on the terms of the pre-existing tariff. But instead,
Affirmed’s past clearing bids resulted in a past legal
consequence — the right to bid again — that sets this case
apart. It is also notable that my colleagues rely on cases
involving the Federal Communications Commission (“FCC”)
that do not involve filed rates or the application of the filed-rate
doctrine, even though the filed-rate doctrine constrains FERC’s
ability to change the terms of the tariff at issue in this case.
My colleagues principally rely on DIRECTV, Inc. v. FCC,
110 F.3d 816 (D.C. Cir. 1997). There, we addressed whether
the FCC had retroactively divested permittees of a right to
receive satellite channels. Id. at 821. Initially, the FCC issued
an order that reserved for permittees “the first right” to a pro
rata share of any additional channels that might later be
surrendered or canceled. Id. at 822. Years later, the FCC
canceled and reclaimed a forfeited channel. The agency,
however, abandoned “its existing, but never implemented,
policy of reassigning channels on a pro rata basis among

-- 45 of 51 --

14
existing permittees . . . .” Respondents’ Brief at 6, DIRECTV,
110 F.3d 816 (No. 96-1001). Instead, when it reclaimed the
forfeited channel, the FCC announced its decision to adopt a
new rule reallocating the forfeited channel through a
competitive auction. Id. We rejected the permittees’
retroactivity claim because the FCC’s former pro rata policy
did not grant them “the right to any specific channel.”
DIRECTV, 110 F.3d at 826. Rather, the former policy had
prospectively established “the Commission’s plan for the
distribution of reclaimed channels, should there ever be any.”
Id.
DIRECTV is inapposite because it involved a prospective
policy that the agency announced but never implemented.
Here, by contrast, the relevant provision of the 2009 tariff was
in effect for fifteen years until PJM decided to change it.
Moreover, the permittees in DIRECTV took no action that
triggered an obligation by the FCC; but in the instant case,
Affirmed succeeded in clearing two capacity auctions with its
EERs, and that obligated PJM to allow it to participate in up to
three more auctions. Although the permittees in DIRECTV
made unilateral business decisions to spend “millions of dollars
building satellites . . . for more channels,” that action had no
legal consequence under the agency’s policy. 110 F.3d at 826.
Thus, the permittees’ business decision rested solely on an
“expectation[]” that the FCC would implement the pro rata
policy. Id. But here, PJM’s tariff amendment operated
retroactively because it was “substantively inconsistent with a
prior agency practice and attache[d] new legal consequences to
events completed before its enactment” — i.e., the amendment
deprived Affirmed of a right that it had already secured when
its EERs cleared in past auctions. Arkema Inc. v. EPA, 618
F.3d 1, 7 (D.C. Cir. 2010) (cleaned up).

-- 46 of 51 --

15
Similarly, National Cable & Telecommunications Ass’n v.
FCC (“NCTA”) is not analogous because it also involved a
straightforward case of upsetting business expectations. 567
F.3d 659 (D.C. Cir. 2009). In NCTA, the FCC banned
exclusivity agreements between cable companies and owners
of apartment buildings due to the agreements’ anticompetitive
effects. Id. at 662. The petitioners challenged the rule by
arguing, in relevant part, that the ban’s application to existing
contracts was retroactive. Id. at 670. We rejected that
argument, noting that “[i]t is often the case that a business will
undertake a certain course of conduct based on the current law,
and will then find its expectations frustrated when the law
changes.” Id. (quoting Chem. Waste Mgmt. v. EPA, 869 F.2d
1526, 1536 (D.C. Cir. 1989)). Such a change in the law that
merely upsets expectations is not retroactive. But we
reaffirmed in NCTA that altering “past legal consequences of
past actions” would be. Id. As discussed, the key fact in the
case before us is that Affirmed’s entitlement to participate in
the auctions for the 2026/27 and 2027/28 delivery years was a
“past legal consequence” of its “past action” of submitting
clearing bids in the 2023/24 and 2024/25 delivery-year
auctions.
Likewise, my colleagues’ reliance on Mobile Relay
Associates v. FCC, 457 F.3d 1 (D.C. Cir. 2006), is misplaced.
In Mobile Relay, we rejected a retroactivity challenge to the
FCC’s decision to reconfigure portions of a radio spectrum,
which incidentally impaired the petitioners’ ability to use their
spectrum licenses. Id. at 10. The petitioners argued that, when
they purchased their licenses at an auction, the FCC had
advertised certain features that allowed “future flexible use,”
which was “one of the economically advantageous assets of the
license.” Petitioners’ Brief at 11, Mobile Relay, 457 F.3d 1
(No. 04-1413). We held that the FCC’s reconfiguration
decision that made the licenses less advantageous posed no

-- 47 of 51 --

16
retroactivity concern because the petitioners’ purchase of the
licenses created only a contingent expectation — not a fixed
legal entitlement — that the FCC’s licensing regime would
continue to permit flexible operations indefinitely. Mobile
Relay, 457 F.3d at 10–11. The FCC’s reconfiguration decision
prospectively affected future operations and did not alter the
legal effect of any past event because the petitioners’ licenses
did not make any guarantees or promises about the
configuration of the spectrum. That, of course, is very different
from the situation now before us, where Section L.4 of the pre-
existing tariff guaranteed Affirmed’s entitlement to participate
in future auctions once its EERs cleared an initial auction.
Notably, we observed in Mobile Relay that the FCC’s
licensing scheme did not, by itself, create vested rights or
otherwise trigger fixed legal consequences based on the terms
of the licenses because “the [FCC] has the unilateral authority,
provided it gives notice to the licensee, to modify a license
‘either for a limited time or for the duration of the term thereof,
if in the judgment of the Commission such action will promote
the public interest, convenience, and necessity.’” 457 F.3d at
12 (quoting 47 U.S.C. § 316(a)(1)); see also Celtronix
Telemetry, Inc. v. FCC, 272 F.3d 585, 589 (D.C. Cir. 2001)
(The FCC “always retain[s] the power to alter the term of
existing licenses by rulemaking.” (emphasis added)). That
statutory backdrop stands in stark contrast to the regulatory
scheme that we consider here. The Communications Act
authorizes the FCC “to modify a license” midstream, “if in the
judgment of the Commission such action will promote the
public interest, convenience, and necessity,” Mobile Relay, 457
F.3d at 12 (quoting 47 U.S.C. § 316(a)(1)); but the tariff
amendment in the instant case was subject to the filed-rate
doctrine, which “leave[s] the Commission no discretion to
waive the operation of a filed rate or to retroactively change or
adjust a rate for good cause or for any other equitable

-- 48 of 51 --

17
considerations,” Old Dominion Elec., 892 F.3d at 1230.
Although my colleagues mention that courts have applied the
filed-rate doctrine “across the spectrum of regulated utilities,”
Maj. Op. at 18 n.2, they fail to acknowledge that the filed-rate
doctrine “does not have a life of its own. Its application
depends on the underlying statute,” Towns of Concord,
Norwood, & Wellesley v. FERC, 955 F.2d 67, 73 (D.C. Cir.
1992). In this instance, the specific features of the governing
statutes are critical, and they make Mobile Relay inapt because
the FCC in that case was not subject to the same constraints
that bind FERC in this case.3
In sum, the FCC cases cited by my colleagues shed little
light on the question of retroactivity in the present context. To
my mind, the most analogous case is Arkema, which more
precisely addresses the meaning of “past legal consequence.”
618 F.3d at 7. There, the EPA’s former rule allowed companies
to permanently transfer their baseline allowances of
hydrochlorofluorocarbons production. Id. at 4. Under that
rule, the petitioner completed a permanent transfer of its
baseline allocation, which the EPA approved. Id. at 7. The
EPA later amended its rule and refused to honor the previously
approved transfer. Id. at 3. We held that the new rule operated
retroactively because it sought to “undo these completed
transactions.” Id. at 9. As we explained, “[t]he Agency’s
approval and acknowledgment of Petitioners’ actions
distinguish[] this case from situations where a company’s
3 To be sure, Title II of the Communications Act, 47
U.S.C. § 203, requires common carriers to publicly file their rates
and tariffs with the FCC, subject to the filed-rate doctrine. Am. Tel.
& Tel. Co. v. Cent. Off. Tel., Inc., 524 U.S. 214, 221–22 (1998). But
the cases cited by my colleagues do not involve the rates filed by
regulated parties and instead primarily consider the FCC’s broader
regulatory authority to manage licenses under Title III of the
Communications Act, 47 U.S.C. §§ 301, 316.

-- 49 of 51 --

18
unilateral business expectations are thwarted by a change in the
regulatory framework.” Id. at 8. Similarly here, FERC
approved — and PJM implemented — a tariff that authorized
EERs’ participation in auctions and conferred multi-year
eligibility once a resource cleared the first auction. This
“successive iteration in a long-running regulatory regime”
remained in effect for fifteen years. Id. at 9. Refusing to honor
Affirmed’s vested entitlement to bid the continued energy
savings from its cleared EERs will “undo what [FERC] had, in
practice, approved under the” 2009 tariff. Id. Heeding
Landgraf’s directive to assess the nature and extent of the tariff
amendment’s change, this case is most similar to Arkema:
PJM’s 2009 tariff operated to approve and acknowledge
Affirmed’s right to participate in the auctions for the 2026/27
and 2027/28 delivery years; Affirmed’s right to bid in
subsequent auctions was a legal consequence of its successful
EER bids in earlier auctions; and the 2024 amendment sought
to “undo [those] completed transactions.” Id.
* * *
For the foregoing reasons, I would grant Affirmed’s
petition in part and vacate FERC’s approval of PJM’s 2024
tariff amendment to the extent that it deprives Affirmed of its
vested right to participate in the capacity auctions for the
2026/27 and 2027/28 delivery years. My fact-bound
conclusion does not suggest, as PJM and FERC claim, that
utilities may never amend their tariffs. What distinguishes this
case is the vesting of Affirmed’s right to bid its EERs in
specific future auctions, under the terms of the tariff provision
at issue. I agree with my colleagues’ conclusion that FERC
may otherwise approve PJM’s proposed tariff amendment and
that it may operate prospectively. I disagree only with the
retroactive divestment of Affirmed’s entitlement to participate

-- 50 of 51 --

19
in the 2026/27 and 2027/28 auctions. I thus respectfully dissent
from Section II.A of the majority opinion.

-- 51 of 51 --