In the United States Court of Appeals for the Ninth Circuit

Transcription

1 Case: , 10/31/2016, ID: , DktEntry: 786, Page 1 of 50 In the United States Court of Appeals for the Ninth Circuit Nos , et al. FERC California Energy Crisis Appeals MMCP/Fuel Allowance/Cost Offset Cases PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA, et al., Petitioners, October 31, 2016 v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. ON PETITIONS FOR REVIEW OF ORDERS OF THE FEDERAL ENERGY REGULATORY COMMISSION BRIEF OF RESPONDENT FEDERAL ENERGY REGULATORY COMMISSION Max Minzner General Counsel Robert H. Solomon Solicitor Beth G. Pacella Deputy Solicitor For Respondent Federal Energy Regulatory Commission Washington, D.C

2 Case: , 10/31/2016, ID: , DktEntry: 786, Page 2 of 50 TABLE OF CONTENTS PAGE STATEMENT OF THE ISSUES..1 STATUTES AND REGULATIONS.2 STATEMENT OF JURISDICTION.3 STATEMENT OF FACTS 3 I. Governmental Entities And Refunds...4 A. The Court Rejected The Commission s 2001 Determination That Refund Period Sales By Governmental Entities Were Subject To Refund...4 B. The Commission s Orders On Remand From Bonneville 6 II. CalPX s $5 Million Shortfall..8 SUMMARY OF ARGUMENT..9 ARGUMENT 11 I. Standard Of Review..11 II. III. The Commission Reasonably Determined That Entities Net Refund Positions Should Be Determined Hourly..13 The Commission Reasonably Determined That CalPX s $5 Million Shortfall Should Be Allocated To All Net Refund Recipients In Proportion To Their Final Refund Positions.21 CONCLUSION.25 STATEMENT OF RELATED CASES 25

3 Case: , 10/31/2016, ID: , DktEntry: 786, Page 3 of 50 TABLE OF AUTHORITIES COURT CASES: PAGE Bonneville Power Admin. v. FERC, 422 F.3d 908 (9th Cir. 2005)...4-6, 20, 25 Cal. Dep t of Water Res. v. FERC, 489 F.3d 1029 (9th Cir. 2007)...13 Cal. ex rel. Harris v. FERC, 809 F.3d 491 (9th Cir. 2015)...3 Cal. ex rel. Lockyer v. FERC, 383 F.3d 1006 (9th Cir. 2004).3 Cal. Trout v. FERC, 572 F.3d 1003 (9th Cir. 2009).11, 13, 17, 18 FERC v. Elec. Power Supply Ass n, 136 S.Ct. 760 (2016).11, 12, 25 Mont. Consumer Counsel v. FERC, 659 F.3d 910 (9th Cir. 2011)...12, 25 Morgan Stanley Capital Grp. v. Pub. Util. Dist. No. 1 of Snohomish Cnty., Wash., 554 U.S. 527 (2008)..3, 12 Motor Vehicle Mfrs. Ass n of U.S., Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29 (1983) 11 MPS Merchant Servs. v. FERC, No , 2016 WL (9th Cir. Sept. 8, 2016) 3, 12, 25 Old Dominion Elec. Coop., Inc. v. FERC, 518 F.3d 43 (D.C. Cir. 2008)..13, 17 ii

4 Case: , 10/31/2016, ID: , DktEntry: 786, Page 4 of 50 TABLE OF AUTHORITIES COURT CASES (continued): PAGE Pacific Gas and Elec. Co. v. FERC, 373 F.3d 1315 (D.C. Cir. 2004) 10, 22, 23 Pacific Gas and Elec. Co. v. United States, No , 2016 WL (Fed. Cir. Oct. 3, 2016)..6 PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203 (D.C. Cir. 2011)..13 Public Utilities Comm n of Cal. v. FERC, 462 F.3d 1027 (9th Cir. 2006)...2, 3, 12 Snoqualmie Indian Tribe v. FERC, 545 F.3d 1207 (9th Cir. 2008) 12 Williams Nat. Gas Co. v. FERC, 90 F.3d 531 (D.C. Cir. 1996)..12, 17 ADMINISTRATIVE CASES: Cal. Indep. Sys. Operator Corp., 105 FERC 61,203 (2003) California Power Exchange Corp., 92 FERC 61,096 (2000).24 Cal. Power Exchange Corp., 105 FERC 61,273 (2003) California Power Exchange Corp., 113 FERC 61,017 (2005)...21 Pacific Gas and Elec. Co. v. Cal. Power Exchange Corp., 109 FERC 61,027 (2004)...24 iii

5 Case: , 10/31/2016, ID: , DktEntry: 786, Page 5 of 50 TABLE OF AUTHORITIES ADMINISTRATIVE CASE (continued): PAGE San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 96 FERC 61,120 (2001)...4, 5 San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 105 FERC 61,066 (2003)...17 San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 110 FERC 61,336, on reh g, 112 FERC 61,226 (2005).8, 22, 23 San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 115 FERC 61,171 (2006).17, 18 San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 121 FERC 61,067 (2007), on reh g, 125 FERC 61,214 (2008), on reh g, 138 FERC 61,091 (2012)...2, 5-8, 13-15, 17-20, 22 San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 136 FERC 61,036 (2011), on reh g, 138 FERC 61,092 (2012)...2, 6-8, STATUTES: Administrative Procedure Act 5 U.S.C. 706(2)(A).11 Energy Policy Act of 2005, Section 1286, 119 Stat. 981 (2005).5 iv

6 Case: , 10/31/2016, ID: , DktEntry: 786, Page 6 of 50 TABLE OF AUTHORITIES STATUTES (continued): PAGE Federal Power Act Section 3(3), 16 U.S.C. 796(3).4 Section 3(4), 16 U.S.C. 796(4).4 Section 3(7), 16 U.S.C. 796(7).4 Section 201(e), 16 U.S.C. 824(e).4 Section 206(e)(2), 16 U.S.C. 824e(e)(2)..5 Section 313(b), 16 U.S.C. 825l(b)..3, 12 v

7 Case: , 10/31/2016, ID: , DktEntry: 786, Page 7 of 50 GLOSSARY Amendment No. 23 Order Amendment No. 51 Order Cal-ISO CalPX Commission February 3, 2012 Order I February 3, 2012 Order II FERC FPA July 15, 2011 Order July 25, 2001 Order May 12, 2006 Order Cal. Power Exch. Corp., 105 FERC 61,273 (2003) Cal. Indep. Sys. Operator Corp., 105 FERC 61,203 (2003) California Independent System Operator Corporation California Power Exchange Federal Energy Regulatory Commission San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 138 FERC 61,091 (2012) San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 138 FERC 61,092 (2012) Federal Energy Regulatory Commission Federal Power Act San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 136 FERC 61,036 (2011) San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 96 FERC 61,120 (2001) San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 115 FERC 61,171 (2006) vi

8 Case: , 10/31/2016, ID: , DktEntry: 786, Page 8 of 50 November 20, 2008 Order October 16, 2003 Order October 19, 2007 Order San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 125 FERC 61,214 (2008) San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 105 FERC 61,066 (2003) San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 121 FERC 61,067 (2007) vii

9 Case: , 10/31/2016, ID: , DktEntry: 786, Page 9 of 50 In the United States Court of Appeals for the Ninth Circuit Nos , et al. FERC California Energy Crisis Appeals MMCP/Fuel Allowance/Cost Offset Cases PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA, et al. Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. ON PETITIONS FOR REVIEW OF ORDERS OF THE FEDERAL ENERGY REGULATORY COMMISSION BRIEF OF RESPONDENT FEDERAL ENERGY REGULATORY COMMISSION STATEMENT OF THE ISSUES This California energy crisis proceeding involves the Federal Energy Regulatory Commission s ( FERC or Commission ) determinations regarding two ratemaking/remedy matters: (1) the time period over which sales and purchases should be netted to determine an entity s refunds; and (2) how to allocate a $5 million shortfall in the California Power Exchange ( CalPX ) account

10 Case: , 10/31/2016, ID: , DktEntry: 786, Page 10 of 50 from which refunds will be paid. 1 San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 121 FERC 61,067 (2007) ( October 19, 2007 Order ) (CPER 391), on reh g, 125 FERC 61,214 (2008) ( November 20, 2008 Order ) (CPER 292), on reh g, 138 FERC 61,091 (2012) ( February 3, 2012 Order I ) (CPER 1); San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 136 FERC 61,036 (2011) ( July 15, 2011 Order ) (CPER 31), on reh g, 138 FERC 61,092 (2012) ( February 3, 2012 Order II ) (CPER 17). The issues on appeal are: 1. Whether the Commission reasonably determined that an entity s sales and purchases should be netted hourly to determine its refunds; and 2. Whether the Commission reasonably determined that a $5 million shortfall in the CalPX account from which refunds will be paid should be allocated to entities that will receive refunds. 2 1 CalPX was a centralized wholesale auction market for trading electricity in California. See Public Utilities Comm n of Cal. v. FERC, 462 F.3d 1027, (9th Cir. 2006) ( Cal. PUC ). 2 This appeal originally involved a third issue, regarding refund cost offsets. On October 12, 2016, however, the Court granted the Commission s motion for partial voluntary remand so that, in light of this Court s and the Commission s rulings since the challenged cost offset determinations were made, the Commission could reconsider that issue. 2

11 Case: , 10/31/2016, ID: , DktEntry: 786, Page 11 of 50 STATUTES AND REGULATIONS Pertinent statutory and regulatory provisions are contained in the Addendum. STATEMENT OF JURISDICTION This Court has jurisdiction under Federal Power Act ( FPA ) section 313(b), 16 U.S.C. 825l(b). STATEMENT OF FACTS This Court is very familiar with the California energy crisis of See MPS Merchant Servs. v. FERC, No , 2016 WL (9th Cir. Sept. 8, 2016); Cal. ex rel. Harris v. FERC, 809 F.3d 491 (9th Cir. 2015); Cal. PUC, 462 F.3d at ; Cal. ex rel. Lockyer v. FERC, 383 F.3d 1006, 1008 (9th Cir. 2004); see also Morgan Stanley Capital Grp. v. Pub. Util. Dist. No. 1 of Snohomish Cnty., Wash., 554 U.S. 527, (2008) (discussing California electric restructuring and consequences). In response to the energy crisis, the Commission initiated a series of proceedings to settle and reform markets going forward and, where appropriate, to provide ratepayer relief for completed transactions. The proceedings here involve two Commission Refund Period (October 2, 2000 through June 20, 2001) remedy/ratemaking determinations: (1) that refunds should be calculated by netting an entity s sales and purchases hourly; and (2) that 3

12 Case: , 10/31/2016, ID: , DktEntry: 786, Page 12 of 50 a $5 million shortfall in the CalPX account from which refunds will be paid should be allocated among all net refund recipients in proportion to their final refund positions. I. Governmental Entities And Refunds A. The Court Rejected The Commission s 2001 Determination That Refund Period Sales By Governmental Entities Were Subject To Refund In 2001, the Commission determined that sales by both public utilities 3 and nonpublic utilities (i.e., governmental entities) made into the CalPX and California Independent System Operator Corporation ( Cal-ISO ) markets during the Refund Period were subject to refund. Bonneville Power Admin. v. FERC, 422 F.3d 908, 910, 913 (9th Cir. 2005) (citing San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 96 FERC 61,120 at 61,499 (2001) ( July 25, 2001 Order )). The Commission reasoned that, while governmental entities were not subject to its direct Federal Power Act jurisdiction, 4 all sellers in the centralized Cal-ISO and 3 Federal Power Act section 201(e), 16 U.S.C. 824(e), defines a public utility as a person who owns or operates facilities subject to the jurisdiction of the Commission. The term person is defined as an individual or corporation (FPA 3(4), 16 U.S.C. 796(4)), and the statutory definition of corporation specifically excludes municipalities (FPA 3(3), 16 U.S.C. 796(3)), which include any city, county,... or other political subdivision or agency of a State (FPA 3(7), 16 U.S.C. 796(7)). See Bonneville, 422 F.3d at In August 2005, Congress passed legislation to extend the Commission s Federal Power Act section 206 refund authority to governmental entities that make voluntary, short term sales of electricity through an organized market in violation 4

13 Case: , 10/31/2016, ID: , DktEntry: 786, Page 13 of 50 CalPX spot markets agreed to accept the same clearing price for any given sale and, therefore, were on notice that those clearing prices were subject to change if found unjust and unreasonable. Id. (citing July 25, 2001 Order, 96 FERC 61,120 at 61,511-12). On appeal, this Court found that the Federal Power Act, as it existed during the Refund Period, unambiguously excluded governmental entities from the Commission s refund authority. Id. at The Court further found that FERC s order does more than simply reset the market-clearing price for power in the FERC-jurisdictional [Cal-ISO] and CalPX markets. FERC specifically ordered governmental entities/non-public utilities to pay refunds, an action that lies outside Congress s clearly expressed intent that FERC s 206 refund authority should apply only to public utilities. Id. at While not unmindful of the impact [its] decision may have on the overall refunds claimed by California ratepayers, the Court noted that it was not [its] task to second guess Congress s judgment as to the breadth of FERC s refund authority. Id. at 911. The Court also pointed out that a remedy might lie in a contract claim in court. Id. at 925. of the Commission s rules or tariffs. Bonneville, 422 F.3d at 921 n.10 (citing Energy Policy Act of , 119 Stat. 981 (2005) (16 U.S.C. 824e(e)(2)); see also October 19, 2007 Order at CPER 404 n.47. 5

14 Case: , 10/31/2016, ID: , DktEntry: 786, Page 14 of 50 B. The Commission s Orders On Remand From Bonneville On remand, in compliance with Bonneville, the Commission vacated its California energy crisis orders to the extent they directed governmental entities to pay refunds. October 19, 2007 Order at CPER P 36. Like this Court, the Commission noted that its inability to direct governmental entities to pay refunds did not preclude parties from pursuing contract claims in appropriate courts. Id. at CPER 404 P 37 (citing Bonneville, 422 F.3d at 925); id. at CPER 413 P 59, CPER 418 P 68; February 3, 2012 Order II at CPER 14 P The Commission determined that the refund shortfall caused by removing governmental entity refund obligations from Cal-ISO s and CalPX s refund calculations should be allocated to refund recipients as a pro rata reduction based on their final net refund positions in relation to total net refunds. October 19, The California Parties filings below state that they initiated civil action against the governmental entities in federal and state courts. See October 19, 2007 Order at CPER 397 P 18, CPER 420 P 76. On October 3, 2016, the Court of Appeals for the Federal Circuit determined that the California Parties lacked standing to sue two federal agencies, the Western Area Power Administration and the Bonneville Power Administration, for breach of contract during the Refund Period. Pacific Gas and Elec. Co. v. United States, No , 2016 WL , at *1, (Fed. Cir. Oct. 3, 2016). The court found that there was no privity of contract between the California Parties and the governmental entities because the purchase and sales contracts were between the CalPX or Cal-ISO and the governmental entities. Id. at *5-*10. The court noted, however, that the absence of an agreement between consumers and producers hardly suggests the lack of a remedy. It may well be that the producers of electric power would have been liable to the exchanges for any overcharges, and that the exchanges in turn would have been liable to the appellant consumers. Id. at *11. 6

15 Case: , 10/31/2016, ID: , DktEntry: 786, Page 15 of 50 Order at CPER P 39. The California Parties asked the Commission to clarify that the refund shortfall would be calculated by netting governmental entities sales and purchases over the entire nine-month Refund Period. See id. at CPER PP In response, the Commission addressed, for the first time, the time period over which an entity s sales and purchases should be netted to determine its refunds. November 20, 2008 Order at CPER PP 16-19; February 3, 2012 Order I at CPER 8-9 PP 17-21; July 15, 2011 Order at CPER 46 P 40; February 3, 2012 Order II at CPER PP While the Commission agreed with the California Parties that sales and purchases should be netted, it found netting over the entire Refund Period would be contrary to the Cal-ISO and CalPX Tariffs, and could have the indirect effect of requiring governmental entities to pay refunds. November 20, 2008 Order at CPER PP 16-19; February 3, 2012 Order I at CPER 8-9 PP 17-18, 20; July 15, 2011 Order at CPER 46 P 40; February 3, 2012 Order II at CPER PP 18-20, 22. Instead, the Commission determined that, since the Cal-ISO and CalPX Tariff provisions applicable to purchases and sales during the Refund Period provided for hourly netting, purchases and sales should be netted hourly. November 20, 2008 Order at CPER PP 16-19; February 3, 2012 Order I at 7

16 Case: , 10/31/2016, ID: , DktEntry: 786, Page 16 of 50 CPER 8 P 17; July 15, 2011 Order at CPER 46 P 40; February 3, 2012 Order II at CPER PP 14, II. CalPX s $5 Million Shortfall In a May 4, 2010 filing to comply with the November 20, 2008 Order, CalPX sought guidance from the Commission as to how it should allocate a $5 million shortfall in its settlement clearing account, the account from which refunds will be paid. CPER CalPX explained that it had recently discovered that, in 2001, it mistakenly transferred $5 million from its settlement clearing account to its operating account and spent the $5 million on operating expenses. See July 15, 2011 Order at CPER 33, 37, 51 PP 5, 13, 52. The Commission determined that, consistent with its prior determinations regarding other shortfalls, this refund shortfall should be allocated among all net refund recipients in proportion to their final refund positions. Id. at CPER 54 P 59 (citing October 19, 2007 Order, CPER P 39 (allocating governmental entity refund shortfall), and San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 110 FERC 61,336 PP 25, 41, 56, on reh g, 112 FERC 61,226 PP 8 & n.5 (2005) (allocating interest shortfall)); February 3, 2012 Order II at CPER PP

17 Case: , 10/31/2016, ID: , DktEntry: 786, Page 17 of 50 SUMMARY OF ARGUMENT At issue here are two Commission remedy/ratemaking determinations. The Commission determinations were reasonable, are due substantial deference, and should be upheld. Hourly Netting The Commission reasonably concluded that entities net refund positions should be determined hourly. As the Commission found, both Cal-ISO s and CalPX s tariffs provided for hourly netting of an entity s purchases and sales. California Parties arguments that the tariffs provided for Refund Periodwide netting of sales and purchases to determine refunds have no merit. While the Cal-ISO tariff provided for netting in certain situations over a period shorter than an hour and provided for the summing of hourly netted amounts over the day and then the month to generate monthly invoices, this did not indicate that the netting interval should be nine months long. In addition, neither Cal-ISO Tariff Amendment No. 51 nor CalPX Tariff Amendment No. 23, cited by the California Parties, addressed how net refunds should be calculated. The Commission also reasonably found that it had not previously determined that refunds should be calculated by netting a participant s purchases and sales period-wide. The Commission orders California Parties cite simply did 9

18 Case: , 10/31/2016, ID: , DktEntry: 786, Page 18 of 50 not address the time period over which purchases and sales should be netted for refund purposes. Allocation Of The $5 Million Shortfall The Commission reasonably determined that, consistent with its prior shortfall allocation determinations, the $5 million shortfall in the CalPX account from which refunds will be paid should be allocated to the entities that will receive refunds. This allocation is not like that in Pacific Gas and Electric Co. v. FERC, 373 F.3d 1315 (D.C. Cir. 2004), which the California Parties cite. Unlike that case, the allocation here does not impose an additional charge on CalPX customers. Rather, it simply allocates a refund shortfall to refund recipients. Moreover, unlike in Pacific Gas and Electric, the refund shortfall and entities final net refund positions are correlated. There also is no merit to California Parties assertion that the Commission should have applied the allocation methodology set out in CalPX tariff section 5.3 in the circumstances here. As the Commission has explained, that chargeback allocation mechanism was added to the credit portion of CalPX s tariff to provide CalPX a means of recovering a defaulting debtor s uncollected receivables from the remaining CalPX market participants. Since the shortfall here was caused by a 10

19 Case: , 10/31/2016, ID: , DktEntry: 786, Page 19 of 50 CalPX accounting error, and not by a defaulting debtor, tariff section 5.3 s chargeback allocation mechanism did not apply. ARGUMENT I. Standard Of Review The Commission s determinations are reviewed under the Administrative Procedure Act s arbitrary and capricious standard. 5 U.S.C. 706(2)(A). Review under this standard is narrow. FERC v. Elec. Power Supply Ass n, 136 S.Ct. 760, 782 (2016); see also Cal. Trout v. FERC, 572 F.3d 1003, 1012 (9th Cir. 2009) (arbitrary and capricious review is highly deferential ). A court is not to ask whether a regulatory decision is the best one possible or even whether it is better than the alternatives. Elec. Power Supply Ass n, 136 S.Ct. at 782. Rather, the court must uphold a rule if the agency has examine[d] the relevant [considerations] and articulate[d] a satisfactory explanation for its action[,] including a rational connection between the facts found and the choice made. Id. (quoting Motor Vehicle Mfrs. Ass n of U.S., Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983)) (alterations by Court). The Court may reverse under the arbitrary and capricious standard if the agency relied on factors that Congress did not intend it to consider, or offered an explanation for its decision that runs counter to the evidence or is so implausible that it could not be ascribed 11

20 Case: , 10/31/2016, ID: , DktEntry: 786, Page 20 of 50 to a difference in view or the product of agency expertise. Snoqualmie Indian Tribe v. FERC, 545 F.3d 1207, 1212 (9th Cir. 2008). The finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive. Id. (quoting FPA 313(b), 16 U.S.C. 825l(b)). Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. MPS Merchant Servs., 2016 WL at *4 (quoting Cal. PUC, 462 F.3d at 1045). If the evidence is susceptible of more than one rational interpretation, [the Court] must uphold FERC s findings. Cal. PUC, 462 F.3d at FERC s discretion is at its zenith when... fashioning... remedies and sanctions[.] MPS Merchant Servs., 2016 WL at *5 (quoting Cal. PUC, 462 F.3d at 1053) (alteration and omissions by Court). Courts afford great deference to the Commission in its rate decisions. Elec. Power Supply Ass n, 136 S.Ct. at 782 (quoting Morgan Stanley, 554 U.S. at 532); see also Mont. Consumer Counsel v. FERC, 659 F.3d 910, 916, 918 (9th Cir. 2011) (same). Moreover, [r]ecognizing that Congress explicitly delegated to FERC broad powers over ratemaking, including the power to analyze relevant contracts, courts give substantial deference to the Commission s interpretation of filed tariffs. Williams Nat. Gas Co. v. FERC, 90 F.3d 531, 533 (D.C. Cir. 1996) (internal quotation omitted). See also MPS Merchant Servs., 2016 WL at *5 (the 12

21 Case: , 10/31/2016, ID: , DktEntry: 786, Page 21 of 50 Court review[s] FERC s interpretation of a tariff with a two-step Chevron-like analysis ) (quoting PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203, 208 (D.C. Cir. 2011) (internal quotation marks omitted)); Old Dominion Elec. Coop., Inc. v. FERC, 518 F.3d 43, 48 (D.C. Cir. 2008) (courts generally give[] substantial deference to [FERC s] interpretation of filed tariffs, even where the issue simply involves the proper construction of language ) (internal quotation omitted). Likewise, the Court must give deference to the Commission s interpretation of its own orders. Cal. Trout, 572 F.3d at 1013 (citing Cal. Dep t of Water Res. v. FERC, 489 F.3d 1029, 1036 (9th Cir. 2007)). II. The Commission Reasonably Determined That Entities Net Refund Positions Should Be Determined Hourly The challenged orders addressed, for the first time, the time period over which an entity s sales and purchases should be netted to determine its refunds. November 20, 2008 Order at CPER PP 16-19; February 3, 2012 Order I at CPER 8-9 PP 17-21; July 15, 2011 Order at CPER 46 P 40; February 3, 2012 Order II at CPER PP For Cal-ISO transactions, the Commission found that section of Cal- ISO s Settlement and Billing Protocols Tariff, which addressed netting of purchases and sales during the Refund Period, required hourly netting of sales and purchases. November 20, 2008 Order at CPER PP 16-19; February 3, 2012 Order I at CPER 5-6, 8 PP 10-11, 17; February 3, 2012 Order II at CPER 23, 25 13

22 Case: , 10/31/2016, ID: , DktEntry: 786, Page 22 of 50 PP 14, 18. Section required that Cal-ISO calculate for each charge the amounts payable by the relevant Scheduling Coordinator... for each Settlement Period of the trading day, and the amounts payable to that Scheduling Coordinator for each charge for each Settlement Period of the trading day and shall arrive at a net amount payable for each charge by or to that Scheduling Coordinator for each charge for that trading day. See November 20, 2008 Order at CPER 298 P 17 (quoting provision). Settlement Period was defined as beginning at the start of the hour, and ending at the end of the hour. See id. at P 18 & n.36 (quoting Cal- ISO s Master Tariff section 11.6). For CalPX transactions, the Commission found that section of CalPX s tariff likewise required hourly netting for CalPX sales and purchases. July 15, 2011 Order at CPER P 40; February 3, 2012 Order II at CPER PP 14, 18. Section provided that [t]he billing and payment process for Energy and Ancillary services traded in the Hour-Ahead Market and the Day-Ahead Market shall be based on the issuance of Preliminary and Final Settlement Statements for each hourly Settlement Period in each Trading Day. See July 15, 2011 Order at CPER P 40 & n.47 (quoting provision). Despite this, the California Parties contend that the Cal-ISO and CalPX tariffs unambiguously require the ISO and PX to net for the entire Refund Period.... Br. at 47. In support of this, they assert that the Cal-ISO tariff 14

23 Case: , 10/31/2016, ID: , DktEntry: 786, Page 23 of 50 provides for some netting to occur at ten minute intervals and that initially-netted figures are again netted daily and then monthly. Br. at As the Commission explained, however, [t]he fact that the [Cal-ISO] tariff provides for netting in certain situations over an interval shorter than an hour or that charges are first netted for the hour and are later summed over the day and over the entire month to generate the monthly invoice offers no support for the California Parties claim that the netting interval period should be nine months long. February 3, 2012 Order I at CPER 8 P 18; see also February 3, 2012 Order II at CPER 26 P 19 (same). The California Parties also mistakenly assert that Cal-ISO Tariff Amendment No. 51 and CalPX Tariff Amendment No. 23 clarify that period wide netting is required for the Refund Period. Br. at 48. (citing Cal. Power Exch. Corp., 105 FERC 61,273 (2003) ( Amendment No. 23 Order ), and Cal. Indep. Sys. Operator Corp., 105 FERC 61,203 at PP 1, 3, 6, 37 (2003) ( Amendment No. 51 Order ). As the Commission found, these tariff amendments did not address how net refunds should be calculated. February 3, 2012 Order II at CPER 26 P The California Parties also note that some charges are levied on periods longer than an hour, like the Grid Management Charge, which is monthly. Br. at 50 (citing CPER 629, Cal-ISO Tariff 8.3). That provision, which addresses allocation of grid management costs, does not address netting. 15

24 Case: , 10/31/2016, ID: , DktEntry: 786, Page 24 of 50 Amendment No. 51 simply permitted Cal-ISO to segregate Refund Period transactions from current transactions so that Cal-ISO would be able to conduct the settlement reruns and invoice adjustments necessary to calculate final refunds. Id. at CPER 26 P 20; see also Amendment No. 51 Order, 105 FERC 61,203 at P 3 (noting that, through Amendment No. 51, Cal-ISO sought approval to have the invoicing and Settlement process for the preparatory adjustments and re-runs completely separated (i.e., walled off ) from the invoicing and settlement process that it was using to clear its market. Currently in the [Cal-ISO] tariff, charges and adjustments for past Trade Dates are added to current trade month Settlement Statements and invoices. ); id. at P 37 ( accept[ing] the tariff provisions that allow for the separation of invoices (walling-off) of the re-run from the monthly market activities... will protect current market participants from the financial consequences of events that occurred during periods when they were not active in the [Cal-ISO] market. ). CalPX s Amendment No. 23 does not help the California Parties either. That amendment simply extended the time period to file disputes regarding Cal- ISO preparatory adjustment and rerun settlement statements. Amendment No. 23 Order, 105 FERC 61,273 at P 3. The Commission s reasonable interpretation of these tariff provisions and the orders approving them, not California Parties contrary interpretation, deserves 16

25 Case: , 10/31/2016, ID: , DktEntry: 786, Page 25 of 50 judicial respect and should be upheld. See Cal. Trout, 572 F.3d at 1013; Old Dominion, 518 F.3d at 48; Williams, 90 F.3d at 533. There also is no merit to California Parties claim that the Commission previously determined that refunds were to be calculated by netting each market participant s purchases and sales period-wide. Br. at (citing San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 115 FERC 61,171 at PP 3, 34, 45 (2006) ( May 12, 2006 Order ); San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 105 FERC 61,066 at P 180 (2003) ( October 16, 2003 Order ); Amendment No. 51 Order, 105 FERC 61,203; Amendment No. 23 Order, 105 FERC 61,273 at PP 1, 3, 6, 37). Interpreting its own orders, the Commission reasonably found otherwise. February 3, 2012 Order I at CPER 9 P 19; February 3, 2012 Order II at CPER 26 P 21. As the Commission explained, [t]he May 12, 2006 Order simply does not address the time period over which the refunds should be netted. February 3, 2012 Order I at CPER 9 P 19; February 3, 2012 Order II at CPER 26 P 21. Instead, that cost offsets order merely noted that the refunds were calculated on a net dollar basis, netting each market participant s refund obligation (amount of energy sold at prices above the [mitigated market clearing price]) with its refund receipt (amount of energy purchased at prices above the [mitigated market clearing price]. February 3, 2012 Order I at CPER 9 P 19 (quoting May 12, 2006 Order 17

26 Case: , 10/31/2016, ID: , DktEntry: 786, Page 26 of 50 at P 34); February 3, 2012 Order II at CPER 26 P 21 (same). While the May 12, 2006 Order determined that cost offset allocations should follow cost offset calculations and, therefore, should be period-wide, see Br. at 52 (citing May 12, 2006 Order at P 45), it did not additionally determine that period-wide netting would apply to the different issue here -- the period over which purchases and sales should be netted for refund purposes. February 3, 2012 Order I at CPER 9 P 19; February 3, 2012 Order II at CPER 26 P 21. Likewise, the October 16, 2003 Order merely affirmed that amounts owed to sellers would be netted out against refunds owed to buyers before refunds would be paid out. February 3, 2012 Order II at CPER 26 P 21. It did not specify an interval [over] which refunds should be netted. Id. Moreover, as just discussed, neither Amendment No. 51 nor Amendment No. 23 addressed netting or the interval over which it should occur. February 3, 2012 Order II at CPER 26 P 20. Again, the Commission s reasonable interpretation of its own orders deserves deference and should be upheld. See Cal. Trout, 572 F.3d at The California Parties undue discrimination claim (Br. at 54-56) fails as well. In California Parties view, the Commission directed period-wide netting in the just-discussed orders, and then, in the orders challenged here, directed hourly netting only for governmental entities. As just explained, however, the challenged orders were the first time the Commission addressed the time period for netting to 18

27 Case: , 10/31/2016, ID: , DktEntry: 786, Page 27 of 50 determine refunds. See February 3, 2012 Order I at CPER 9 P 19; February 3, 2012 Order II at CPER 26 P 21. After reviewing and interpreting Cal-ISO s and CalPX s tariffs, the Commission determined that they provide for hourly netting of entities sales and purchases. November 20, 2008 Order at CPER PP 16-19; February 3, 2012 Order I at CPER 5-6, 8 PP 10-11, 17; February 3, 2012 Order II at CPER PP 14, 18; July 15, 2011 Order at CPER P 40. That determination was not limited to governmental entities sales and purchases. November 20, 2008 Order at CPER PP (finding that netting refunds over the entire Refund Period would be contrary to the Cal-ISO tariff, and directing that Cal-ISO calculate refunds amounts using hourly netting); February 3, 2012 Order I at CPER 5-6, 8, 9 PP 10-11, 17, 20 (same); July 15, 2011 Order at CPER P 40 (finding that netting refunds over the entire Refund Period would be contrary to the CalPX tariff, and directing that Cal-PX calculate refunds amounts using hourly netting); February 3, 2012 Order II at CPER P 14 (same). Even if the Commission had determined that hourly netting applied only to governmental entities, that determination would not have been unduly discriminatory. Governmental entities were not exactly the same as all other market participants, as California Parties assert (Br. at 55). Rather, unlike other market participants, governmental entities were excluded from the Commission s 19

28 Case: , 10/31/2016, ID: , DktEntry: 786, Page 28 of 50 refund authority during the Refund Period. Bonneville Power Admin., 422 F.3d at Accordingly, the Commission appropriately was concerned that netting refunds over the entire Refund Period was not only contrary to the tariffs, but also improperly could have the indirect effect of requiring governmental entities and other non-public utilities to pay refunds. November 20, 2008 Order at CPER 298 P 16. Finally on this issue, California Parties assert that governmental entities will now receive millions of dollars of refunds on their gross purchases so long as their sales and purchases happened to occur on different sides of an hour-long interval. Br. at 55. As the Commission found, California Parties provided no data or documentation to support this assertion. February 3, 2012 Order I at CPER 9 P 20; February 3, 2012 Order II at CPER P 22. In fact, their own witness testimony showed that there were many hours in which a Governmental Entity both bought and sold power. Request for Rehearing of October 19, 2007 Order at CPER 871 (citing Dr. Berry s testimony). The Commission s determination that, consistent with Cal-ISO s and CalPX s tariffs, an entity s refunds should be determined by netting its purchases and sales hourly was reasonable, deserves deference, and should be upheld. 20

29 Case: , 10/31/2016, ID: , DktEntry: 786, Page 29 of 50 III. The Commission Reasonably Determined That CalPX s $5 Million Shortfall Should Be Allocated To All Net Refund Recipients In Proportion To Their Final Refund Positions CalPX discovered there was a $5 million shortfall in the account from which refunds will be paid because, in 2001, it mistakenly transferred those funds to its operating account and spent them. CalPX then sought the Commission s guidance as to how to allocate the shortfall. CPER CalPX suggested that perhaps the shortfall could be allocated as going-forward (as opposed to historical) costs under a 2005 Settlement approved by the Commission in California Power Exchange Corp., 113 FERC 61,017 (2005). Id. at CPER 676. The Commission found that the 2005 Settlement did not apply here. February 3, 2012 Order II at CPER P 13. Section 15 of that settlement stated that it did not apply to issues arising from the instant refund proceeding or to billing disputes arising from the refund rerun process. Id. Moreover, the Commission found, since the erroneous transfer was not discovered until years after it occurred, there was no way to determine how the transferred funds were spent and, therefore, whether they would be allocated as historical or goingforward costs under that settlement. July 15, 2011 Order at CPER P 59. Consistent with its prior determinations regarding governmental entity and interest refund shortfalls, the Commission determined that this refund shortfall should be allocated among all net refund recipients in proportion to their final 21

30 Case: , 10/31/2016, ID: , DktEntry: 786, Page 30 of 50 refund positions. Id. at CPER 54 P 59 (citing October 19, 2007 Order, CPER P 39 (allocating governmental entity refund shortfall based on net refund recipients pro rata share of total net refunds), and San Diego Gas & Elec. Co., 110 FERC 61,336 PP 25, 41, 56, on reh g, 112 FERC 61,226 PP 8 & n.5 (allocating interest shortfall (i.e., the difference between the interest rate required by the Commission s regulations and the interest rate actually earned by the CalPX on money held in the trust settlement account) based on the final net interest position for each participant in relation to the total amount of the interest shortfall)); February 3, 2012 Order II at CPER PP California Parties argue that allocating the refund shortfall to net refund recipients is nearly identical to the allocation rejected in Pacific Gas and Elec., 373 F.3d Br. at California Parties argument is mistaken. See February 3, 2012 Order II at CPER PP Pacific Gas and Electric involved allocation of costs incurred in winding-up CalPX s business affairs. 373 F.3d at 1316, The Commission approved CalPX s proposal that any party with an outstanding CalPX balance would pay a percentage of CalPX s wind-up costs equal to its percentage of the total outstanding account balances. Id. at The Court found that this allocation would impose additional charges on CalPX customers based on their prior purchases without reflecting any new jurisdictional services in violation of the filed 22

31 Case: , 10/31/2016, ID: , DktEntry: 786, Page 31 of 50 rate doctrine or rule against retroactive ratemaking. Id. at The Court further found that there was no correlation between the size of an account balance and the magnitude of the relevant former CalPX customer s likely benefit from, or stake in, CalPX s wind-up activities. Id. at At issue here, by contrast, is allocation of a shortfall in refund funds available in CalPX s settlement clearing account. February 3, 2012 Order II at CPER PP 6, 9-12; July 15, 2011 Order at CPER 51, PP 52, 59. As with the refund shortfall caused by the Commission s inability to direct governmental entities to pay refunds, the Commission appropriately determined that this refund shortfall should be allocated to entities that will receive refunds, i.e., net refund recipients. February 3, 2012 Order II at CPER PP 6, 9-12; July 15, 2011 Order at CPER P 59. Neither of the concerns present in Pacific Gas and Electric are present here. Allocating the refund shortfall to net refund recipients does not impose additional charges on CalPX customers. February 3, 2012 Order II at CPER 22 P 12; see also, e.g., San Diego Gas & Elec., 110 FERC 61,336 at P 32 (explaining that allocating the interest shortfall was not a new charge, but the result of CalPX s failure to earn the interest rate required by the Commission s regulations), cited in July 15, 2011 Order at CPER 54 P 59. Instead, it allocates a refund shortfall to those who will receive refunds. In addition, while there was no correlation 23

32 Case: , 10/31/2016, ID: , DktEntry: 786, Page 32 of 50 between the size of an account balance and the magnitude of a former customer s likely benefit from, or stake in, CalPX s wind-up activities, the refund shortfall at issue here and an entity s final net refund position are correlated. See February 3, 2012 Order II at CPER 22 P 12 (finding allocation of the refund shortfall to net refund recipients based on their final net refund positions to be the most equitable allocation). California Parties also argue that the Commission should have applied the allocation methodology set out in CalPX tariff section 5.3, CPER 645. Br. at 58. But that provision does not apply in the circumstances here. As the Commission has explained, CalPX tariff section 5.3 s chargeback is an allocation mechanism intended to allow [CalPX] to recover the uncollected receivables of a defaulting [CalPX] debtor from the remaining participants in the [CalPX] market. Pacific Gas and Elec. Co. v. Cal. Power Exchange Corp., 109 FERC 61,027 at P 3 (2004); see also Cal. Power Exchange Corp., 92 FERC 61,096 at 61, (2000) (explaining that CalPX proposed tariff 5.3 to address allocation of losses caused by default ). The shortfall here was not caused by a defaulting CalPX debtor, but by a CalPX accounting error. February 3, 2012 Order II at CPER PP 6, 9, 11, 12; July 15, 2011 Order at CPER P 59. Not surprisingly, therefore, CalPX did not propose using 5.3 s chargeback allocation here. 24

33 Case: , 10/31/2016, ID: , DktEntry: 786, Page 33 of 50 CONCLUSION FERC s remedy/rate determinations here involve both technical understanding and policy judgment, and should be upheld. See Elec. Power Supply Ass n, 136 S. Ct. at 784; MPS Merchant Servs., 2016 WL at *5; Mont. Consumer Counsel, 659 F.3d at 916, 918. The petitions for review should be denied. STATEMENT OF RELATED CASES Per Circuit Rule , the governmental entities portion of this case is on remand from Bonneville Power Admin. v. FERC, 422 F.3d 908, 910, 913 (9th Cir. 2005). Other than those stated in Petitioners Statement of Related Cases, no additional cases are related to this one. Respectfully submitted, Max Minzner General Counsel Robert H. Solomon Solicitor Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C Phone: beth.pacella@ferc.gov /s/ Beth G. Pacella Beth G. Pacella Deputy Solicitor October 31,

34 Case: , 10/31/2016, ID: , DktEntry: 786, Page 34 of 50 CERTIFICATE OF COMPLIANCE In accordance with Fed. R. App. P. 32(a)(7)(C) and 9th Cir. R. 32-1, I certify that this brief is proportionally spaced, has a typeface of 14 points, and contains 5,773 words, not including the tables of contents and authorities, the glossary, the certificate of counsel, and the addendum. /s/ Beth G. Pacella Beth G. Pacella Deputy Solicitor Federal Energy Regulatory Commission Washington, DC TEL: (202) FAX: (202) beth.pacella@ferc.gov October 31, 2016

35 Case: , 10/31/2016, ID: , DktEntry: 786, Page 35 of 50 ADDENDUM Statutes

36 Case: , 10/31/2016, ID: , DktEntry: 786, Page 36 of 50 TABLE OF CONTENTS PAGE Administrative Procedure Act 5 U.S.C. 706(2)(A)... A1 Federal Power Act: Section 3, 16 U.S.C. 796(3),(4),(7)... A2 Section 201(e), 16 U.S.C. 824(e)... A6 Section 206(e)(2), 16 U.S.C. 824e(2)... A8 Section 313, 16 U.S.C. 825l(b)... A11

37 Case: , 10/31/2016, ID: , DktEntry: 786, Page 37 of TITLE 5 GOVERNMENT ORGANIZATION AND EMPLOYEES Page 120 dicial review may be brought against the United States, the agency by its official title, or the appropriate officer as defendant Actions reviewable Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority. (Pub. L , Sept. 6, 1966, 80 Stat. 392.) HISTORICAL AND REVISION NOTES Derivation U.S. Code Revised Statutes and Statutes at Large... 5 U.S.C. 1009(c). June 11, 1946, ch. 324, 10(c), 60 Stat Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface of this report Relief pending review When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review. On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court, including the court to which a case may be taken on appeal from or on application for certiorari or other writ to a reviewing court, may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings. (Pub. L , Sept. 6, 1966, 80 Stat. 393.) HISTORICAL AND REVISION NOTES Derivation U.S. Code Revised Statutes and Statutes at Large... 5 U.S.C. 1009(d). June 11, 1946, ch. 324, 10(d), 60 Stat Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface of this report Scope of review To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall (1) compel agency action unlawfully withheld or unreasonably delayed; and (2) hold unlawful and set aside agency action, findings, and conclusions found to be (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (D) without observance of procedure required by law; (E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or (F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error. (Pub. L , Sept. 6, 1966, 80 Stat. 393.) HISTORICAL AND REVISION NOTES Derivation U.S. Code Revised Statutes and Statutes at Large... 5 U.S.C. 1009(e). June 11, 1946, ch. 324, 10(e), 60 Stat Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface of this report. ABBREVIATION OF RECORD Pub. L , Aug. 28, 1958, 72 Stat. 941, which authorized abbreviation of record on review or enforcement of orders of administrative agencies and review on the original papers, provided, in section 35 thereof, that: This Act [see Tables for classification] shall not be construed to repeal or modify any provision of the Administrative Procedure Act [see Short Title note set out preceding section 551 of this title]. CHAPTER 8 CONGRESSIONAL REVIEW OF AGENCY RULEMAKING Sec Congressional review. Congressional disapproval procedure. Special rule on statutory, regulatory, and judicial deadlines. Definitions. Judicial review. Applicability; severability. Exemption for monetary policy. Effective date of certain rules Congressional review (a)(1)(a) Before a rule can take effect, the Federal agency promulgating such rule shall submit to each House of the Congress and to the Comptroller General a report containing (i) a copy of the rule; (ii) a concise general statement relating to the rule, including whether it is a major rule; and (iii) the proposed effective date of the rule. (B) On the date of the submission of the report under subparagraph (A), the Federal agency promulgating the rule shall submit to the Comptroller General and make available to each House of Congress (i) a complete copy of the cost-benefit analysis of the rule, if any; (ii) the agency s actions relevant to sections 603, 604, 605, 607, and 609; A1

38 Case: , 10/31/2016, ID: , DktEntry: 786, Page 38 of a TITLE 16 CONSERVATION Page 1238 The commission may make such expenditures (including expenditures for rent and personal services at the seat of government and elsewhere, for law books, periodicals, and books of reference, and for printing and binding) as are necessary to execute its functions. Expenditures by the commission shall be allowed and paid upon the presentation of itemized vouchers therefor, approved by the chairman of the commission or by such other member or officer as may be authorized by the commission for that purpose subject to applicable regulations under chapters 1 to 11 of title 40 and division C (except sections 3302, 3306(f), 3307(e), 3501(b), 3509, 3906, 4104, 4710, and 4711) of subtitle I of title 41. (June 10, 1920, ch. 285, pt. I, 2, 41 Stat. 1063; June 23, 1930, ch. 572, 1, 46 Stat. 798; renumbered pt. I, Aug. 26, 1935, ch. 687, title II, 212, 49 Stat. 847; Oct. 28, 1949, ch. 782, title XI, 1106(a), 63 Stat. 972; Oct. 31, 1951, ch. 654, 2(14), 65 Stat. 707.) CODIFICATION All appointments referred to in the first sentence are subject to the civil service laws unless specifically excepted by those laws or by laws enacted subsequent to Executive Order 8743, Apr. 23, 1941, issued by the President pursuant to the Act of Nov. 26, 1940, ch. 919, title I, 1, 54 Stat. 1211, which covered most excepted positions into the classified (competitive) civil service. The Order is set out as a note under section 3301 of Title 5, Government Organization and Employees. As to the compensation of such personnel, sections 1202 and 1204 of the Classification Act of 1949, 63 Stat. 972, 973, repealed the Classification Act of 1923 and all other laws or parts of laws inconsistent with the 1949 Act. The Classification Act of 1949 was repealed Pub. L , Sept. 6, 1966, 8(a), 80 Stat. 632, and reenacted as chapter 51 and subchapter III of chapter 53 of Title 5. Section 5102 of Title 5 contains the applicability provisions of the 1949 Act, and section 5103 of Title 5 authorizes the Office of Personnel Management to determine the applicability to specific positions and employees. In text, chapter 51 and subchapter III of chapter 53 of title 5 substituted for the Classification Act of 1949, as amended on authority of Pub. L , 7(b), Sept. 6, 1966, 80 Stat. 631, the first section of which enacted Title 5, Government Organization and Employees. In text, chapters 1 to 11 of title 40 and division C (except sections 3302, 3306(f), 3307(e), 3501(b), 3509, 3906, 4104, 4710, and 4711) of subtitle I of title 41 substituted for the Federal Property and Administrative Services Act of 1949, as amended on authority of Pub. L , 5(c), Aug. 21, 2002, 116 Stat. 1303, which Act enacted Title 40, Public Buildings, Property, and Works, and Pub. L , 6(c), Jan. 4, 2011, 124 Stat. 3854, which Act enacted Title 41, Public Contracts. AMENDMENTS 1951 Act Oct. 31, 1951, inserted reference to applicable regulations of the Federal Property and Administrative Services Act of 1949, as amended, at end of section Act Oct. 28, 1949, substituted Classification Act of 1949 for Classification Act of Act June 23, 1930, substituted provisions permitting the commission to appoint, prescribe the duties, and fix the salaries of, a secretary, a chief engineer, a general counsel, a solicitor, and a chief accountant, and to appoint such other officers and employees as are necessary in the execution of its functions and fix their salaries, and authorizing the detail of officers from the Corps of Engineers, or other branches of the United States Army, to serve the commission as engineer officers, or in any other capacity, in field work outside the seat of government, and the detail, assignment or transfer to the commission of engineers in or under the Departments of the Interior or Agriculture for work outside the seat of government for provisions which required the commission to appoint an executive secretary at a salary of $5,000 per year and prescribe his duties, and which permitted the detail of an officer from the United States Engineer Corps to serve the commission as engineer officer; and inserted provisions permitting the commission to make certain expendi-tures necessary in the execution of its functions, and allowing the payment of expenditures upon the presen-tation of itemized vouchers approved by authorized persons. REPEALS Act Oct. 28, 1949, ch. 782, cited as a credit to this section, was repealed (subject to a savings clause) by Pub. L , Sept. 6, 1966, 8, 80 Stat. 632, a. Repealed. Pub. L , title I, 103(5), Oct. 4, 1961, 75 Stat. 787 Section, Pub. L , title I, 101, July 12, 1960, 74 Stat. 430, authorized the Federal Power Commission to place four additional positions in grade 18, one in grade 17 and one in grade 16 of the General Schedule of the Classification Act of , 795. Omitted CODIFICATION Section 794, which required the work of the commission to be performed by and through the Departments of War, Interior, and Agriculture and their personnel, consisted of the second paragraph of section 2 of act June10, 1920, ch. 285, 41 Stat. 1063, which was omitted in the revision of said section 2 by act June 23, 1930, ch. 572, 1, 46 Stat The first and third paragraphs of said section 2 were formerly classified to sections 793 and 795 of this title. Section 795, which related to expenses of the commission generally, consisted of the third paragraph of section2 of act June 10, 1920, ch. 285, 41 Stat Such section 2 was amended generally by act June 23, 1930, ch. 572, 1, 46 Stat. 798, and is classified to section 793 of this title. The first and second paragraphs of said section 2 were formerly classified to sections 793 and 794 of this title Definitions The words defined in this section shall have the following meanings for purposes of this chapter, to wit: (1) public lands means such lands and interest in lands owned by the United States as are subject to private appropriation and disposal under public land laws. It shall not include reservations, as hereinafter defined; (2) reservations means national forests, tribal lands embraced within Indian reservations, military reservations, and other lands and interests in lands owned by the United States, and withdrawn, reserved, or withheld from private appropriation and disposal under the public land laws; also lands and interests in lands acquired and held for any public purposes; but shall not include national monuments or national parks; (3) corporation means any corporation, joint-stock company, partnership, association, business trust, organized group of persons, whether incorporated or not, or a receiver or receivers, trustee or trustees of any of the foregoing. It shall not include municipalities as hereinafter defined; A2