Petition for Review of Orders of the Federal Energy
Regulatory Commission. Nos. ER12-715-001; ER12-715-003;
Michael J. Thompson, Wendy N. Reed, Patrick L. Morand, WRIGHT
& TALISMAN, P.C., Washington, D.C., for Petitioners.
J. Banta, FEDERAL ENERGY REGULATORY COMMISSION, Washington,
D.C., for Respondent.
Symons, MCGUIRE WOODS LLP, Washington, D.C., Matthew Allen
Fitzgerald, MCGUIRE WOODS LLP, Richmond, Virginia, for Duke
E. Parke, Stacey Burbure, Karen Anita Sealy, FIRSTENERGY
CORPORATION, Akron, Ohio, John Lee Shepherd, Jr., Timothy T.
Mastrogiacomo, James P. Daly, SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP, Washington, D.C., for Intervenor FirstEnergy.
Before: KEITH, BATCHELDER, and SUTTON, Circuit Judges.
SUTTON, Circuit Judge.
Independent System Operator, Inc., is a nonprofit association
of utilities that manages electrical transmission facilities
on behalf of its members. Under its well-earned acronym, MISO
approves infrastructure projects and allocates the costs
among its member utilities in order to maintain the
electrical grid and increase its capacity. Duke Energy and
American Transmission Systems own utilities in Ohio and
Kentucky, and they withdrew from MISO in 2011. At stake is
whether the utilities must pay for projects that MISO
approved after they announced their departure but before they
left. The Federal Energy Regulatory Commission ruled in favor
of the utilities. Because the Commission correctly
interpreted the terms of MISO's Tariff, we deny the
petition for review of its order.
a regional "association of utilities that own
electrical transmission lines interconnected to form a
regional grid and that agree to delegate operational control
of the grid to the association." Ill. Commerce
Comm'n v. FERC, 721 F.3d 764, 769 (7th Cir. 2013).
It oversees the electrical grid in all or part of fifteen
states in the Midwest and South, including Michigan and
Kentucky, as well as the Canadian province of Manitoba.
Id. at 769-70. Beginning in 2006, the Federal Energy
Regulatory Commission approved changes to MISO's Tariff
that enabled it to authorize network expansion projects and
divide the costs among the member utilities. See Pub.
Serv. Comm'n of Wis. v. FERC, 545 F.3d 1058, 1059
(D.C. Cir. 2008). The Tariff initially had just two project
categories: Baseline Reliability Projects and Market
2009, American Transmission Systems gave notice that it
planned to withdraw from MISO and integrate its Ohio
facilities with PJM Interconnection, a neighboring
transmission organization. Duke Energy's Ohio and
Kentucky utilities followed suit in May 2010. Under the
Tariff, a utility cannot withdraw from MISO any earlier than
the last day of the year following the year it gives notice.
Art. Five, § 1, App'x 635.
months after Duke announced its intention to withdraw, MISO
proposed a new category of more expensive expansion
projects-Multi-Value Projects-most of which would carry wind
power to urban markets. Ill. Commerce Comm'n,
721 F.3d at 771. The Commission approved this revision to the
Tariff. Midwest Indep. Transmission Sys. Operator,
Inc., 133 FERC ¶ 61, 221 (2010). In August 2010,
MISO authorized the first Multi-Value Project.
Transmission withdrew from MISO in May 2011 before it
approved any more Multi-Value Projects. But in early December
2011, just weeks before Duke's scheduled departure, MISO
approved a portfolio of sixteen projects, estimated to cost
billions of dollars in total. MISO proposed adding a
provision to the Tariff, given the harmless-sounding label of
Schedule 39, which ...