City Utilities of Springfield, Missouri v. FERC
CourtCourt of Appeals for the D.C. Circuit
Date FiledAugust 11, 2026
Docket24-1270
StatusPublished
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Full Opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 2, 2025 Decided August 11, 2026
No. 24-1270
CITY UTILITIES OF SPRINGFIELD, MISSOURI, ET AL.,
PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
BASIN ELECTRIC POWER COOPERATIVE, ET AL.,
INTERVENORS
Consolidated with 24-1282, 24-1283, 24-1285, 24-1372,
25-1007, 25-1023
On Petitions for Review of Orders of the
Federal Energy Regulatory Commission
Charlotte Taylor argued the cause for petitioners. With
her on the briefs were James C. Beh, Christopher R. Jones,
Shereen J. Panahi, Charles D. Wallace III, John P. Coyle,
Natalie M. Karas, Heather H. Starnes, Dana Shelton, Justin A.
Swaim, and Ashley Bond. Carrie L. Bumgarner and Timothy
T. Mastrogiacomo entered appearances.
2
Carol J. Banta, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on
the brief were David L. Morenoff, Deputy General Counsel,
and Robert H. Solomon, Solicitor.
Erin Murphy argued the cause for intervenors. With her
on the brief were Adrienne E. Clair, Nicholas A. Aquart, Jesse
Halpern, Rebecca L. Shelton, Kimberly B. Frank, Matthew J.
Binette, and Ruth M. Porter.
Before: SRINIVASAN, Chief Judge, HENDERSON and
GARCIA, Circuit Judges.
Opinion for the Court filed by Circuit Judge GARCIA.
GARCIA, Circuit Judge: Southwest Power Pool, Inc.
operates the electric transmission grid covering much of the
central United States. SPP proposed to shift the costs of four
electric-transmission facilities, which had been borne primarily
by the facilities’ local zone, across the broader SPP region.
The Federal Energy Regulatory Commission approved that
proposal based on evidence that the four facilities are primarily
serving and benefiting customers outside of that local zone.
Petitioners—utilities, transmission owners, and a state
regulator representing affected ratepayers whose costs would
increase as a result—argue that FERC’s approval was
inadequately reasoned and unsupported by substantial
evidence. We disagree and deny the petitions for review.
I
A
The Federal Power Act (FPA) gives FERC authority over
the rates governing the interstate transmission of electricity.
16 U.S.C. § 824(b). All such rates must be “just and
reasonable” and may not grant any “undue preference or
advantage.” Id. § 824d(a)–(b). The just and reasonable
standard “incorporate[s] a ‘cost-causation principle.’” Old
Dominion Elec. Coop. v. FERC, 898 F.3d 1254, 1255 (D.C. Cir.
3
2018) (quoting Ala. Elec. Co-op, Inc. v. FERC, 684 F.2d 20, 27
(D.C. Cir. 1982)). That principle requires rates to “reflect to
some degree the costs actually caused by the customer who
must pay them.” KN Energy Inc. v. FERC, 968 F.2d 1295,
1300 (D.C. Cir. 1992).
Under Section 205 of the FPA, public utilities may
propose “rates and charges.” 16 U.S.C. § 824d(c); see Atl.
City Elec. Co. v. FERC, 295 F.3d 1, 9 (D.C. Cir. 2002). Those
rates and charges are collected in a filing known as a “tariff.”
18 C.F.R. § 35.2(c)(1). The utility proposing a rate change
bears the burden of showing that it is “just and reasonable.”
Advanced Energy Mgmt. All. v. FERC, 860 F.3d 656, 662 (D.C.
Cir. 2017) (quoting 16 U.S.C. § 824d(e)). When presented
with such a proposal, FERC plays “an essentially passive and
reactive role.” Id. (quoting City of Winnfield v. FERC, 744
F.2d 871, 875–76 (D.C. Cir. 1984)). FERC asks whether the
new rate would be reasonable, not whether it is “‘more or less
reasonable’ than other possible rate designs.” N.Y. State Pub.
Serv. Comm’n v. FERC, 104 F.4th 886, 891 (D.C. Cir. 2024)
(quoting City of Bethany v. FERC, 727 F.2d 1131, 1136 (D.C.
Cir. 1984)). So long as the proposal falls within the “zone of
reasonableness,” FERC must accept it. Id.
B
SPP is a regional transmission organization that operates a
large electric-transmission system across the central United
States. It divides its region into eighteen local price zones.
Transmission facilities (such as power lines) move electricity
throughout the SPP grid. A transmission facility’s location
does not necessarily determine who benefits from its use—an
individual facility, for example, might serve power to local
customers and to other parts of the SPP region. These cases
concern SPP’s efforts to equitably allocate the costs of such
facilities throughout the region.
Since 2010, SPP has used the “Highway/Byway” method
4
to allocate the costs of transmission facilities. See Sw. Power
Pool, 131 FERC ¶ 61,252, at P 62 (2010), order on reh’g, 137
FERC ¶ 61,075 (2011). Highway/Byway uses operating
voltage to determine the assignment of facility costs.
Facilities operating at 300 kilovolts or above are designated
“Highway” facilities—their costs are allocated entirely on a
regional basis. See Sw. Power Pool, 131 FERC ¶ 61,252, at
PP 10, 23. Those operating between 100 and 300 kilovolts are
“Byway” facilities—33 percent of their costs are allocated
regionwide and 67 percent to the host zone. Id. at PP 10, 12,
23. Any remaining facilities operating at or below 100
kilovolts have their costs allocated entirely to the local host
zone. See id. at P 10. FERC found that method consistent
with the cost-causation principle because evidence showed that
higher-voltage facilities “tend to support regional power flows”
across multiple zones, while lower-voltage facilities “tend to
support local power flows within a single . . . SPP zone.” Id.
at P 73.
The Highway/Byway method also includes a periodic
review process known as the Regional Cost Allocation Review
(RCAR). This process evaluates whether the method
continues to produce appropriate long-term benefit-to-cost
ratios across SPP’s zones. See Sw. Power Pool, 189 FERC
¶ 61,128, at P 48 (2024) (“Rehearing Order”). RCAR
assesses the Highway/Byway cost allocation at a systemwide
and zonal level; the latter serves “to indicate that a zone’s
benefits are roughly commensurate with the costs allocated to
the zone.” Id. at P 4. RCAR does not assess the costs and
benefits of individual facilities. See id. at P 48.
The four facilities at issue here lie in the Sunflower Zone,
which covers central and western Kansas. SPP originally
classified these facilities as Byways based on their operating
voltages. See Sw. Power Pool, 187 FERC ¶ 61,123, at PP 2, 7
(2024) (“Initial Order”). Later, SPP concluded that, despite
that classification, the facilities were increasingly serving a
5
regional function due to expanding wind generation in the
zone. Unlike gas or coal generation, which can typically be
sited near the customers it serves, wind generation can be built
at scale only where wind resources are abundant. See
Southwest Power Pool, Inc. Submission of Tariff Revisions,
Docket No. ER24-1583-000, at 9 (Mar. 20, 2024) (“March
2024 Filing”). Wind-rich areas therefore may generate more
electricity than local demand requires, and some of that surplus
electricity ends up being transmitted to customers elsewhere in
the region. See id. at 9, 11. According to SPP, that is what
happened here: Over time, the four facilities increasingly
carried power generated in the Sunflower Zone to serve users
elsewhere in the SPP region. See id. at 11, 28. SPP
concluded that, despite their Byway designation, these
facilities were providing regional benefits more characteristic
of Highway facilities. See id. at 28.
SPP set out to correct that misalignment. In 2021, SPP
proposed to amend its tariff to allow its board of directors to
grant facility-by-facility waivers from the Highway/Byway
voltage-based framework. FERC rejected the proposal,
reasoning that it gave the board too much discretion without
clear standards or sufficient transparency. See Sw. Power
Pool, 175 FERC ¶ 61,198, at PP 9, 39–40 (2021). SPP then
submitted a revised proposal that would channel the power to
grant waivers through more specific criteria. See Southwest
Power Pool, Inc. Submission of Tariff Revisions, FERC
Docket No. ER22-1846-000 (May 10, 2022). FERC initially
accepted that revision. See Sw. Power Pool, 181 FERC
¶ 61,076, at P 1 (2022). But it reversed course on rehearing,
concluding that the revised waiver process continued to raise
concerns about excessive discretion and inadequate
transparency. See Sw. Power Pool, 184 FERC ¶ 61,028, at PP
49–52 (2023), order on reh’g, 185 FERC ¶ 61,189, at PP 29,
32, 37, 41 (2023). Petitions challenging those orders remain
before this court and have been held in abeyance pending
resolution of these consolidated petitions. Order, Sunflower
6
Electric Power Corp. v. FERC, Nos. 23-1264 et al. (D.C. Cir.
Dec. 26, 2024) (per curiam).
Blocked from the waiver route, SPP pursued a different fix
in March 2024. Rather than seeking ongoing authority to
grant waivers itself, SPP filed a Section 205 proposal asking
FERC to approve a prospective reclassification of just the four
Sunflower Byway facilities as Highways. See March 2024
Filing at 1, 4, 18, 28. Before filing, SPP’s Regional State
Committee—comprising regulators from twelve states—
approved the proposal by an 8-4 vote. Id. at 3 & n.8; Sw.
Power Pool Reg’l State Comm., Minutes, Agenda Item 5 (Oct.
30, 2023), https://perma.cc/4XA8-4YYZ.
To justify that targeted request, SPP relied on the capacity,
flow, and benefit criteria it had developed for the 2022 waiver
proposal. March 2024 Filing at 28. Together, these criteria
aimed to address whether the four facilities functioned more
like regional Highway facilities than Byway facilities. The
capacity criterion provided zone-wide context: It asked
whether generation capacity in the Sunflower Zone that was
not tied to serving local customers exceeded the zone’s average
peak electricity demand during the prior year. Id. at 19. The
flow criterion then asked, for each facility, whether more than
70 percent of the power flow over that facility attributable to
Sunflower Zone generation came from generators not serving
local customers. Id. at 19–20. The benefit criterion asked
whether the facilities provided projected cost savings over a
specified threshold to customers outside the Sunflower Zone.
Id. at 21.
SPP evaluated the four facilities under the above criteria
in three separate studies, and FERC found that those studies
supplied substantial evidence supporting the proposed regional
allocation. Rehearing Order at PP 8, 18. The capacity
analyses showed that generation capacity in the Sunflower
Zone not tied to serving local customers far exceeded local
demand. Id. at P 19 & n.67. Specifically, SPP’s initial
7
analysis placed that generation capacity at 364 percent of the
zone’s average peak demand, and its updated analysis placed it
at 338 percent—both well above the 100-percent threshold for
satisfying the capacity criterion. March 2024 Filing at 23, 29.
SPP’s flow analysis showed that, depending on the facility,
between 73.2 and 95.8 percent of the power flow attributable
to Sunflower Zone generation came from generators not tied to
serving local customers. Rehearing Order at P 20. By
comparison, the average figure for Byway facilities in the SPP
region was “approximately 27 percent.” Id. The benefit
analyses likewise showed substantial projected cost savings for
customers outside of the Sunflower Zone. Id. at P 21; March
2024 Filing at 21, 26.
FERC concluded that “SPP’s analysis shows that, while
customers in the Sunflower Zone were paying 67% of the costs
for the Sunflower Byway Facilities under the Highway/Byway
method, these facilities are primarily being used to serve
customers outside the Sunflower Zone.” Rehearing Order at
P 22. The facilities were, in short, “essentially functioning as
Highway facilities.” Id.
FERC therefore accepted SPP’s proposal to prospectively
reclassify the four facilities, Initial Order at P 1, and reaffirmed
that decision on rehearing, Rehearing Order at P 2. Petitioners
seek review of both orders.
II
We review FERC’s orders under the Administrative
Procedure Act’s arbitrary-and-capricious standard. See E.
Tex. Elec. Coop., Inc. v. FERC, 90 F.4th 579, 587 (D.C. Cir.
2024) (citing 5 U.S.C. § 706(2)(A)). We ask whether FERC
“examined the relevant data and articulated a rational
connection between the facts found and the choice made.”
SFPP, L.P. v. FERC, 967 F.3d 788, 795 (D.C. Cir. 2020)
(quoting ExxonMobil Oil Corp. v. FERC, 487 F.3d 945, 951
(2007)). Because ratemaking requires technical judgments
8
within FERC’s expertise, our review is “particularly
deferential.” E. Tex. Elec. Coop., 90 F.4th at 587. We
therefore “may not substitute our own judgment for that of the
Commission,” or “ask whether FERC’s decision is the best one
possible or even whether it is better than the alternatives.”
Emera Maine v. FERC, 854 F.3d 9, 22 (D.C. Cir. 2017)
(cleaned up).
FERC’s factual findings are conclusive when substantial
evidence supports them. See 16 U.S.C. § 825l(b); S.C. Pub.
Serv. Auth. v. FERC, 762 F.3d 41, 54 (D.C. Cir. 2014). That
standard requires “more than a scintilla” but “less than a
preponderance” of the record evidence. S.C. Pub. Serv. Auth.,
762 F.3d at 54 (quoting Fla. Gas Transm. Co. v. FERC, 604
F.3d 636, 645 (D.C. Cir. 2010)).
SPP’s Section 205 proposal to reclassify the four
Sunflower facilities as Highway facilities rested on a simple
observation: Although the facilities were classified as
Byways under Highway/Byway’s voltage criteria, significant
evidence showed that they were primarily serving and
benefiting customers outside the Sunflower Zone and thus
operating as Highways. FERC accepted the proposal on that
basis and approved a prospective reallocation of the facilities’
remaining costs. Petitioners challenge that conclusion in four
ways. None persuades.
A
Petitioners first argue that FERC failed to adequately
explain why it approved shifting all remaining costs of the four
Sunflower facilities regionwide when RCAR showed that the
Sunflower Zone was already a net beneficiary of the
Highway/Byway system. Recall that SPP periodically
reviews the reasonableness of cost allocations under
Highway/Byway through RCAR, the zonal review-and-
recommendation process. See Rehearing Order at P 4. That
review generates a cost-benefit ratio for each zone. Id. A
9
ratio below 0.8 indicates an “imbalance” and triggers a process
for considering adjustments; such a finding, however, does not
mandate that SPP take any particular action to reallocate costs.
See id.; see also id. at P 45.
RCAR analyses have shown favorable results for the
Sunflower Zone: Both the 2016 and 2023 reviews showed
benefit-to-cost ratios for Sunflower of approximately 3.7.
Request for Rehearing of Southwestern Electric Power
Company, et al. at 6–7, Sw. Power Pool, 189 FERC ¶ 61,128
(No. ER24-1583-001). That figure far exceeded the 0.8
benchmark (though we note that it was below the SPP-wide
benefit-to-cost ratio of 5.76 and below the ratios for 11 other
SPP zones reported in 2023). See id. at 15 fig. 7.1.
Petitioners urge that FERC gave those results insufficient
weight when approving SPP’s request. Doing so, petitioners
emphasize, further benefits the Sunflower Zone when RCAR
shows it is already a net beneficiary of the Highway/Byway
system.
FERC’s treatment of the RCAR assessment passes our
deferential review. FERC first explained that RCAR’s
process has never served as the exclusive method for
identifying cost imbalances or other grounds for adjusting cost
allocation under the Highway/Byway framework. See
Rehearing Order at PP 47, 51. Petitioners agree with that
much. See Petitioners’ Brief 29. FERC then explained why
it gave RCAR’s results limited weight when evaluating SPP’s
proposal. By design, RCAR is a “‘big picture’ zonal” analysis
that does not ask whether the costs of “individual Byway
facilities within a zone” are allocated in a manner that is
“‘roughly commensurate’ with the benefits they provide.”
Rehearing Order at P 48. RCAR and SPP’s proposal thus
“have different objectives.” Id. Although both concern the
alignment of costs and benefits, they examine that alignment at
different levels of generality. Therefore, a favorable zone-
wide RCAR ratio does not establish that the costs of each
10
individual facility within the zone are properly allocated.
FERC’s orders recounted at length the strong evidence
that these specific facilities were functioning as Highways and
delivering substantial benefits outside the Sunflower Zone.
See supra Section I.B. And FERC concluded that the big-
picture, zonal RCAR figure did not require it to deny SPP’s
facility-specific proposal. See Rehearing Order at PP 47–48.
FERC could have articulated a more direct affirmative
rationale for why the facility-specific adjustment was
warranted despite RCAR’s results. But this court will
“uphold a decision of less than ideal clarity if the agency’s path
may reasonably be discerned.” Motor Vehicle Mfrs. Ass’n of
the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983) (quoting Bowman Transp. Inc. v. Ark.-Best Freight
Sys., Inc., 419 U.S. 281, 286 (1974)).
Petitioners are surely correct that Sunflower’s positive
RCAR results are relevant context and at minimum raise the
question whether it was necessary to reallocate these facilities’
costs, given that doing so seems to render the Sunflower Zone
even more of a “net winner.” Those RCAR results might,
conceivably, have supported a finding that the existing Byway
cost allocation remained just and reasonable. But whether
retaining Byway cost allocation would have been just and
reasonable was not the question before FERC, much less the
question before this court. Because SPP proposed the
reclassification in a Section 205 filing, FERC was deciding
only whether that proposal fell within the range of reasonable
approaches to the issue. See N.Y. State Pub. Serv. Comm’n,
104 F.4th at 891. Our task, in turn, is to assess whether FERC
reasonably answered that question in the affirmative. From
that perspective, FERC’s treatment of the RCAR issue was
sufficient. At bottom, the fact that RCAR did not show a
zone-wide imbalance did not prohibit FERC from allowing
SPP to reclassify facilities that it reasonably found to present a
facility-specific cost-benefit imbalance.
11
B
Petitioners next contend that, to comply with the cost-
causation principle, FERC should have assessed whether and
to what extent the four facilities provide benefits to each of the
other 17 SPP zones before permitting the cost reallocation.
For purposes of this argument, petitioners assume that SPP
showed that these facilities primarily benefited customers
outside the Sunflower Zone. But they argue that this
aggregate showing was insufficient. Because reclassifying
the facilities as Highways would require customers in each of
the other zones in the SPP region to pay increased costs for
those facilities, petitioners say FERC needed to find that the
increased costs assigned to each zone were roughly
commensurate with the benefits that zone received. And
because FERC did not do so, petitioners argue that it
“misapplied the cost causation principle and acted arbitrarily
and capriciously.” Petitioners’ Brief 36. The result,
petitioners warn, is that some non-Sunflower zones may bear
increased costs while receiving little or no benefit from the
facilities.
FERC reasonably explained its decision not to conduct
that granular, zone-by-zone analysis. The cost-causation
principle requires that rates “reflect the costs of providing” the
service and that “burden” be “matched with benefit.” Old
Dominion, 898 F.3d at 1255 (internal quotation marks omitted).
But, as FERC emphasized, the standard is approximate: Costs
must be allocated “in a manner that is roughly commensurate
with [the] benefits received.” Id. at 1256 (emphasis added)
(quoting Transmission Planning & Cost Allocation by
Transmission Owning & Operating Public Utilities, 76 Fed.
Reg. 49,842, 49,932 (Aug. 11, 2011)); see Rehearing Order at
P 18. Costs need not be allocated with “exacting precision.”
Midwest ISO Transmission Owners v. FERC, 373 F.3d 1361,
1371 (D.C. Cir. 2004). The costs assessed need only “bear
some resemblance” to the benefits received. Pub. Serv. Elec.
12
& Gas Co. v. FERC (“PSEG”), 989 F.3d 10, 13 (D.C. Cir.
2021).
This approach is reflected in the nature of the very
Highway/Byway framework petitioners ask FERC to strictly
enforce. That framework assigns individual facilities’ costs
wholly locally, wholly regionally, or split 67-to-33 percent
based entirely on the facilities’ operating voltage. Sw. Power
Pool, 137 FERC ¶ 61,075, at P 2. There is no further
accounting for the degree to which each individual zone
benefits from a facility deemed a Highway or Byway facility
based on voltage. Indeed, when FERC approved the
methodology in 2011, it explicitly recognized that SPP was not
required to “trace the costs and benefits” of each facility to
“individual entities or zones.” Id. at P 29. The framework
thus distinguishes between local and regional cost allocation in
broad strokes; it does not attempt to further apportion the
regional share of costs among individual zones. Petitioners’
insistence that FERC should have assessed costs and benefits
zone by zone before approving SPP’s proposal is therefore
difficult to square with the nature of the Highway/Byway
framework itself. See also Paragould Light & Water Comm’n
v. FERC, 144 F.4th 287, 293 (D.C. Cir. 2025) (recognizing that
FERC need not adopt a “hyper-granular approach” when
allocating costs in a regional transmission system).
FERC found that regionwide cost allocation was “roughly
commensurate” with benefits received “[e]ven assuming
arguendo that the distribution of the [facilities’] benefits among
individual SPP zones varies.” Rehearing Order at P 23.
Given that FERC was operating against the backdrop of the
Highway/Byway framework, that assessment was reasonable
based on the evidence that the facilities were “essentially
functioning as Highway[s],” not Byways. Id. at P 22. That
is, the “facilities [we]re primarily being used to serve
customers outside the Sunflower Zone.” Id. Again, the
evidence showed that between 73.2 and 95.8 percent of the
13
power flowing over these facilities came from generators not
serving customers in the Sunflower Zone, compared with
approximately 27 percent for Byway facilities generally. Id.
at P 20. Together with the capacity and benefit analyses, that
evidence supported FERC’s finding that the facilities primarily
served load outside the Sunflower Zone and provided regional
benefits far exceeding those reflected in the 33 percent regional
cost-allocation for Byway facilities. See id. at PP 20, 31.
Given the nature of the Highway/Byway framework,
which petitioners do not challenge, the record evidence
provided FERC a reasonable basis to conclude that regional
cost allocation was roughly commensurate with regional
benefits, even without quantifying those benefits zone by zone.
C
Petitioners next raise an argument based on Order No.
1000’s ex ante cost-allocation requirement. That order
requires transmission providers to establish in advance the
methods used to allocate the costs of facilities selected through
regional transmission planning. See 76 Fed. Reg. at 49,929.
Petitioners contend that FERC departed from that
requirement—without acknowledging or adequately
explaining the departure—by approving an ad hoc, midstream
change to the cost allocation for facilities long classified as
Byways.
We disagree. Order No. 1000 does not make every
allocation produced under an ex ante method irrevocable, and
it did not categorically bar FERC from considering SPP’s
filing. The order expressly states that its requirement “does
not infringe upon a utility’s right to propose rates under Section
205 of the FPA.” 76 Fed. Reg. at 49,927. FERC made the
same point in rejecting petitioners’ suggestion that the original
Byway allocation was “locked in” for the facilities’ operating
lives. Rehearing Order at P 59. It explained that Order No.
1000 “does not and cannot constrain SPP’s authority to submit
14
FPA section 205 filings” or prevent FERC from carrying out its
statutory duty to ensure that rates remain just and reasonable.
Id. at P 60.
As FERC noted, we rejected a similar argument in PSEG.
Id. at P 60 n.228. There, we explained that Order No. 1000
requires transmission owners—not FERC—to maintain cost-
allocation methods and that no FERC order can “ever trump
the plain meaning of a statute.” 989 F.3d at 19 (cleaned up).
Thus, we held that FERC permissibly ordered a reallocation of
the costs of specific facilities notwithstanding a charge that
doing so violated Order No. 1000’s ex ante principle. Id.
Petitioners observe that PSEG arose under Section 206, under
which FERC had first found the existing allocation unjust and
unreasonable. See FirstEnergy Serv. Co. v. FERC, 758 F.3d
346, 348–49, 353 (D.C. Cir. 2014) (contrasting Section 205
with Section 206, under which FERC—on its own initiative or
in response to a complaint—may revise an existing rate only
after finding it unlawful). But that difference is immaterial.
Because SPP proceeded under Section 205, FERC was not
required to first find the existing Byway allocation unlawful.
It needed only to determine that SPP’s proposed revision was
just and reasonable. See N.Y. State Pub. Serv. Comm’n, 104
F.4th at 891.
The remaining question is whether FERC adequately
explained its approval of this particular adjustment
notwithstanding the ex ante principle. It did. FERC
acknowledged that principle and emphasized that SPP’s filing
left Highway/Byway intact and addressed only the prospective
allocation of the remaining costs of the four identified
facilities. See Rehearing Order at PP 58–60. Its decision
rested on “specific facts and analyses” showing that fully
regional allocation would be “at least roughly commensurate
with benefits.” Id. at P 58.
Petitioners respond that those analyses did not establish a
genuinely changed circumstance because Sunflower
15
anticipated substantial wind development when
Highway/Byway was adopted in 2010. But anticipating such
development generally did not establish how these particular
facilities would later be used. By 2024, installed wind-
generation capacity had grown to nearly six times its 2011
level, and SPP’s capacity, flow, and benefit studies showed that
the four facilities were functioning predominantly as regional
assets and providing substantial benefits outside of the
Sunflower Zone. FERC thus grounded its decision in
evidence of the facilities’ current use and benefits. See id. at
P 43 (explaining that “the record shows that circumstances, and
hence the facilities’ usage, changed meaningfully”).
Petitioners are on firmer ground in warning that repeated
facility-specific reallocations could erode the stability and
predictability that ex ante allocation is designed to provide.
But FERC expressly stated that this proceeding did not
“establish a standard process that can be used by various
entities going forward,” and reaffirmed that Section 205 and
the cost-causation principle would constrain any future
proposal. Id. at P 60–61.
FERC thus adequately addressed the asserted departure
from past practice and explained why this limited, prospective
reallocation was justified notwithstanding Order No. 1000’s ex
ante principles. Even assuming the decision marked a
departure from prior practice, FERC supplied the requisite
“good reasons” for the change. See FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009).
D
Finally, petitioners challenge FERC’s reliance on SPP’s
capacity, flow, and benefit analyses. We conclude that FERC
reasonably treated those analyses as substantial evidence that
the four facilities were functioning primarily as regional assets
and that petitioners’ objections do not establish that FERC
acted arbitrarily or capriciously in relying on them.
16
Our review of FERC’s technical judgments in this context
is “particularly deferential.” S.C. Pub. Serv. Auth., 762 F.3d
at 54–55. And, again, the cost-causation principle only
requires that allocated costs be “at least roughly
commensurate” with benefits and that no party bears costs
“grossly disproportionate” to the benefits it receives. Old
Dominion, 898 F.3d at 1256, 1261. Those principles afford
FERC substantial latitude to determine what technical
evidence to rely on.
Petitioners first emphasize that the criteria were never
incorporated into SPP’s tariff. Petitioners contend that the
criteria therefore could not support an ad hoc departure from
Highway/Byway’s voltage-based allocation scheme. But the
criteria’s absence from the tariff did not prevent FERC from
considering the analyses as evidence when evaluating SPP’s
Section 205 filing. FERC did not treat the criteria as binding
rules or endorse them “for all future circumstances.”
Rehearing Order at P 32. It considered the results of SPP’s
three studies and determined that they constituted sufficient
evidence “in the narrow circumstances of this proceeding.”
Id. Nor did SPP devise the criteria for this filing without prior
scrutiny. SPP developed them through a multi-year
stakeholder process, and FERC had previously concluded that
their substantive focus on capacity, flow, and benefits was
consistent with cost-causation principles. See March 2024
Filing at 17, 18; Rehearing Order at P 33 & n.124. And
FERC’s rejection of SPP’s earlier proposal does not suggest
otherwise. That proposal would have added the criteria to the
tariff as part of a new waiver process, but FERC rejected it
because of concerns about the process’s discretion and
transparency, not because it doubted the relevance or reliability
of the criteria. See supra Section I.B.
Petitioners also raise methodological objections to each of
the three criteria. We find no error in FERC’s technical
judgments.
17
Start with the capacity analysis. As explained earlier,
that analysis provided zone-wide context by showing that
generation capacity in the Sunflower Zone not tied to serving
local customers substantially exceeded local demand. See
supra Section I.B. SPP’s evidence showed that generation
capacity “is more than triple the Sunflower Zone’s average 12-
month . . . load,” indicating that the zone had substantial excess
generation capacity not tied to local load. Rehearing Order at
P 19. Petitioners argue that much of the generation counted in
the analysis could not, for technical reasons, have been carried
by the four facilities at issue. But the capacity analysis was
not designed to establish which facilities carried electricity
from that generation. FERC treated this as a threshold finding
that showed the zone as a whole had substantial generation
available for export; the flow analysis separately supplied the
facility-specific link by modeling the flows over each facility.
See, e.g., id. (“Thus, we continue to find . . . that generation
capacity in the Sunflower Zone greatly exceeds the load in that
Zone, which, in combination with the flow analyses discussed
below, indicates that the Sunflower Byway Facilities provide
benefits beyond the Sunflower Zone by allowing that excess
generation to serve load in the greater SPP region.” (cleaned
up)). FERC reasonably considered the capacity analysis for
the zone-wide context it provided.
Petitioners next challenge the flow analysis. They argue
that attributing flows to particular generators is fundamentally
specious because electricity cannot be traced to its source; that
regional exports ordinarily travel over higher-voltage Highway
facilities; and that SPP’s results conflict with the analysis
underlying Highway/Byway, which found typical interzonal
flows of about 38 percent for facilities operating at 115 to 138
kilovolts. FERC reasonably rejected those arguments based
on the specific evidence SPP presented. First, the inability to
trace individual electrons to their source did not undermine
SPP’s modeling, which used technical methods to estimate, for
each facility, the share of flow attributable to generation
18
affiliated or unaffiliated with Sunflower load. See id. at PP
20, 33. Petitioners notably did not offer any competing
modeling or facility-specific data undermining SPP’s results.
Second, FERC explained that the general tendency for power
to follow higher-voltage paths did not foreclose the possibility
of substantial regional flows over lower-voltage facilities, just
as SPP’s modeling showed. See id. at P 37. Similarly, the
earlier 38 percent figure reflected the typical regional use of
facilities within that voltage range; it did not foreclose a
showing that particular facilities would carry substantially
greater flows in the future. See id.
Finally, petitioners challenge the benefit analysis, which
relied on complex production cost modeling to conclude that
the four facilities provide benefits to load outside the zone.
See id. at P 21. Petitioners complain that FERC reached that
conclusion only by averaging one projection showing higher
costs with another, more optimistic version showing cost
reductions. Petitioners characterize the latter as an
“aggressive” forecast, but provide us no more specific basis to
question FERC’s reliance on it. Petitioners’ Brief 67.
Taken together, the three analyses provided substantial
evidence that the four facilities “are primarily used to serve
load outside of the Sunflower Zone and thus benefit the SPP
region.” Rehearing Order at P 20. Petitioners’ objections do
not show that FERC acted arbitrarily or capriciously in relying
on those analyses.
III
The petitions for review are denied.
So ordered.