Before: Silberman, Ginsburg, and Sentelle, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
On Petitions for Review of Orders of the Federal Energy Regulatory Commission
Opinion for the Court filed by Circuit Judge Ginsburg.
Petitioners seek review of two declaratory orders of the Federal Energy Regulatory Commission interpreting the Public Utility Regulatory Policies Act (PURPA), 16 U.S.C. Section(s) 824a-3. Because the two orders do nothing more than set out the position that the Commission would take in an enforcement action before the district court, we are without jurisdiction to review them.
In June 1987 the Southeastern Connecticut Regional Resources Recovery Authority, a political subdivision of the State of Connecticut chartered to dispose of municipal waste, petitioned the Connecticut Department of Utility Control (CDUC) for a declaration that Section(s) 16-243e of the Connecticut General Statutes required the Connecticut Light and Power Company (CL&P) to purchase electricity from a cogeneration facility operated by the Authority at the rate the utility charges a municipality for electricity. The CDUC ordered CL&P to pay the municipal rate, as the statute clearly commands.
CL&P appealed this decision to the Supreme Court of Connecticut, arguing that the PURPA preempts Section(s) 16-243e, at least insofar as the Connecticut statute would require a utility to pay more for electricity than its avoided cost. The Court held that the CDUC had misapplied Section(s) 16-243e and remanded the matter for the agency to recalculate the rate. Connecticut Light & Power Co. v. Department of Public Utility Control, 554 A.2d 1089 (1989). The Court did not address CL&P's claim of preemption.
Believing that the rate calculated by the CDUC on remand still exceeded its avoided cost, CL&P sued the Authority in federal district court seeking a declaratory judgment that the PURPA preempts Section(s) 16-243e. Applying the doctrine of primary jurisdiction, the district court stayed the proceeding for CL&P first to seek a declaratory ruling from the FERC. Connecticut Light & Power Co. v. South Eastern [sic] Connecticut Regional Resources Recovery Authority, 822 F. Supp. 888 (D.Conn. 1993). CL&P duly petitioned the FERC for an answer to the question: "Does federal law preempt the application of Section(s) 16-243e of the Connecticut General Statutes to CL&P either in all circumstances or as Section(s) 16-243e has been applied in the context of the resources recovery facility of the Southeastern Regional Resources Recovery Authority located in Preston, Connecticut?" Connecticut Light & Power Co., 70 FERC Para(s) 61,012 (January 11, 1995).
The Commission declared that the PURPA preempts Section(s) 16-243e. Id. Section 210(f) of the PURPA requires the Commission to ensure that the rate a utility pays to a cogenerator is no higher than the utility's avoided cost. See Section(s) 824a-3(b) ("No such rule prescribed under subsection (a) of this section shall provide for a rate which exceeds the incremental cost to the electric utility of alternative electric energy"), and 824a-3(d) (defining incremental cost); American Paper Institute Inc. v. American Electric Power, 461 U.S. 402, 406 (1983) (PURPA and implementing regulations "requir[e] a utility to purchase electricity from a [qualified facility] at a rate equal to the utility's full avoided cost.") According to the Commission, the PURPA gives the States responsibility only for "implementing" the rules promulgated by the Commission, citing Section(s) 824a-3(f); it does not authorize the States to override or to subvert those rules, as Section(s) 16-243e would do.
The Commission also declared that it would not apply its newly-announced preemption analysis to invalidate contracts that had not previously been challenged on the ground of preemption. "The appropriate time to challenge a state-imposed rate," the Commission reasoned, "is up to or at the time the contract is signed, not several years into a contract which heretofore has been satisfactory to both parties."
The Authority requested rehearing of the preemption issue. Niagara Mohawk also petitioned for rehearing, arguing that the Commission should apply its decision to all contracts regardless whether they had previously been challenged on the ground of preemption. The Commission denied both petitions, Connecticut Light & Power Co., 71 FERC ...