On May 2, 2008, the D.C. Circuit issued an important opinion addressing the relationship between the Federal Power Act's requirements that a party (1) file a request for rehearing with FERC before requesting judicial review and (2) seek judicial review within 60 days of an order on rehearing. Western Area Power Admin. v. FERC, Case No. 04-1090, 2008 WL 1932780 (D.C. Cir., May 2, 2008) ("WAPA"). In WAPA, the court for the first time dismissed a petition for review as untimely on the grounds that the petitioner had improperly filed with FERC a request for rehearing of an order denying rehearing.

WAPA involved two hearings and a series of FERC orders related to Pacific Gas & Electric Company's attempts to pass through certain costs imposed by the California ISO. After an initial hearing, FERC issued Opinion No. 463 approving the pass-through over the objections of several parties. On rehearing, in Opinion No. 463-A, FERC concluded that issues of material fact had not been resolved and ordered a second hearing. Following the second hearing, FERC approved the pass-through in Order No. 463-B. Parties sought rehearing of Opinion No. 463-B, and in Opinion No. 463-C, FERC denied those requests for rehearing. Opinion No. 463-C affirmed the rationale of Opinion No. 463-B and also added an additional reason for approving the pass-through. One party, the Cogeneration Association of California and Energy Producers and Users Coalition ("Cogen Association") filed a request for rehearing of Opinion No. 463-C. FERC summarily dismissed the Cogen Association's request for rehearing, and the Cogen Association then filed a petition for review with the D.C. Circuit. The petition for review was filed more than 60 days after the issuance of Opinion No. 463-C, but within 60 days of FERC's final order summarily denying rehearing of Opinion No. 463-C.

In considering whether the Cogen Association's petition for review was timely, the court analyzed its earlier decisions addressing the issue of when a party is required to file successive petitions for rehearing with FERC. Under those precedents, a party is required to seek rehearing of an order on rehearing only if the result of the order on rehearing differs from that reached by FERC in the initial order. A successive request for rehearing is unnecessary if FERC merely adopts a new rationale upholding the same result. In contrast, if FERC reaches a new result, the party must file a successive request for rehearing.

For the first time, the court concluded that its earlier orders not only establish when a party must file successive requests for rehearing, "they also indicate when a challenge becomes ripe for judicial review. When a petition for rehearing is not necessary — i.e., when a rehearing has been denied in its entirely with no substantive modification in the order — the case is ripe for judicial review and the clock on the [60-day] jurisdictional time-bar starts ticking." WAPA, slip op. at pp. 20-21. In other words, the 60-day time period commenced upon the issuance of Opinion No. 463-C. Since the Cogen Association sought judicial review after the expiration of the 60-day window, the D.C. Circuit dismissed the Cogen Association's petition for review for want of appellate jurisdiction.

The effects of the WAPA decision are likely to be far-reaching. If a party decides not to file a successive request for rehearing, FERC may be able to claim that the failure to do so in certain circumstances precludes the party from seeking judicial review. On the other hand, if a party does file a successive rehearing request, FERC is likely to claim that the party is time-barred from pursuing an appeal. Entities will have to carefully evaluate these competing interests in order to fully preserve their rights to judicial review of FERC orders.

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For further information, please contact the following attorneys in our Energy Client Services Group:

Schiff Hardin LLP