Braintree Electric Light Department v. Federal Energy Regulatory Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 21, 2008 Decided December 16, 2008
No. 04-1335
BRAINTREE ELECTRIC LIGHT DEPARTMENT , ET AL.,
PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION ,
RESPONDENT
ISO NEW ENGLAND I NC ., ET AL .,
I NTERVENORS
Consolidated with 05-1210, 05-1212, 06-1144
On Petition for Review of Orders
of the Federal Energy Regulatory Commission
John P. Coyle argued the cause and filed the briefs for
petitioners.
Colleen Mary McConnell, Assistant Attorney General,
Attorney General’s Office for the Commonwealth of

-- 1 of 17 --

2
Massachusetts, and Bruce C. Johnson, Attorney, Office of
Consumer Counsel, were on the brief for intervenors in
support of petitioners. Joseph W. Rogers, Assistant Attorney
General, Attorney General’s Office for the Commonwealth of
Massachusetts, entered an appearance.
Beth G. Pacella, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on
the brief were Cynthia A. Marlette, General Counsel, and
Robert H. Solomon, Solicitor. John P. Coyle, Attorney,
entered an appearance.
Howard H. Shafferman and Daniel R. Simon were on the
brief for intervenor ISO New England Inc.
Before: GRIFFITH, Circuit Judge, and E DWARDS and
WILLIAMS, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
WILLIAMS, Senior Circuit Judge: This appeal presents
the issue of whether the Federal Energy Regulatory
Commission may approve rates filed by a Regional
Transmission Organization (“RTO”) to cover the cost of
activity that for some purposes may be classified as lobbying.
Rejecting petitioners’ contentions that approval of the rates
was arbitrary and capricious and violated their First
Amendment rights, we affirm FERC’s orders.
* * *
Since 1996, in an effort to facilitate the development of
competitive wholesale power markets, FERC has required
power utilities to provide non-discriminatory open access
transmission services. To this end it has encouraged creation

-- 2 of 17 --

3
of RTOs—entities consolidating control of all transmission
services in a particular region. Promoting Wholesale
Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities, 61 Fed. Reg.
21,540, 21,667 (1996) (“Order No. 888”) (“We continue to
support the development of [RTOs]”). But the Commission
found that the requirement of non-discriminatory access did
not fully accomplish its efficiency goals. See Regional
Transmission Organizations, 65 Fed. Reg. 810, 817 (2000)
(“Order No. 2000”) (detailing inefficiencies that remained
after Order No. 888). Hence, in Order No. 2000, the
Commission stepped up the pressure, requiring transmission-
owning utilities either to participate in an RTO or to explain
their failure to do so. See 18 C.F.R. § 35.34(a), (c), (g), (h);
Regional Transmission Organizations, 65 Fed. Reg. at 812.
Order No. 2000 required all RTOs to meet a minimum
independence requirement, but allowed RTOs to assume
“different organizational forms” in order to satisfy the
independence characteristic. Regional Transmission
Organizations, 65 Fed. Reg. at 811 (“the Commission is not
proposing a ‘cookie cutter’ organizational format”). Among
the forms explicitly approved in Order No. 2000, see id. at
836, was one that FERC had noted in Order No. 888, an
independent system operator or “ISO.” This would “separate
operation of the transmission grid and access to it from
economic interests in generation” and provide what the
Commission called “operational unbundling.” Order No. 888,
61 Fed. Reg. at 21,551–52 n.115 & 21,594 n.41 (internal
quotations omitted).
The RTO involved in the present case is operated under
just such an arrangement. It originated in 1971 with the
formation of the New England Power Pool (“NEPOOL”),
which in 1997 obtained FERC approval for the creation of
ISO New England Inc. (“ISO-NE”), a “private, non-profit

-- 3 of 17 --

4
entity to administer New England energy markets and operate
the region’s bulk power transmission system.” NSTAR
Electric & Gas Corp. v. FERC, 481 F.3d 794, 796 (D.C. Cir.
2007). Ultimately ISO-NE requested approval to establish
itself as an RTO under Order No. 2000. FERC gave its
approval in 2004, relying, in part, on the fact that as a “not-
for-profit entity governed by an independent, non-stakeholder
board,” ISO-NE met Order No. 2000’s independence
requirement. ISO-NE, 106 FERC ¶ 61,280 at P 51, order on
reh’g, 109 FERC ¶ 61,147 (2004), aff’d sub nom. Maine Pub.
Utilities Comm’n v. FERC, 454 F.3d 278 (D.C. Cir. 2006).
As a FERC-authorized RTO, ISO-NE is required to
submit its tariff to FERC for approval under § 205 of the
Federal Power Act, 16 U.S.C. § 824(d). The tariff is meant to
establish rates that will provide customers with “open access
to the regional transmission system to all electricity generators
. . . in a non-discriminatory manner.” Midwest ISO
Transmission Owners v. FERC, 373 F.3d 1361, 1364 (D.C.
Cir. 2004). Section 205 requires that the rates be “just and
reasonable.”
At issue in the current proceeding are the tariff sheets
ISO-NE submitted for FERC approval covering its 2005 and
2006 revenue requirements. In each tariff ISO-NE sought
over two million dollars in funding for accounts associated
with “Government Affairs,” “Public Information,” and
“Regulatory Affairs” (collectively, “external affairs”). See
ISO-NE, 109 FERC ¶ 61,383 at P 18 (2004); ISO-NE, 113
FERC ¶ 61,341 at P 10 (2005). These accounts were elements
of total administrative budgets exceeding $100,000,000 a
year. See ISO-NE, 109 FERC ¶ 61,383 at P 3; ISO-NE, 113
FERC ¶ 61,341 at P2.
In response to both tariffs, petitioners Braintree Electric
Light Department, Reading Municipal Light Department, and

-- 4 of 17 --

5
Taunton Municipal Lighting Plant (collectively, “BRT”)—all
ISO-NE customers—intervened and argued that further
information was required to determine if the costs ISO-NE
sought to recover for external affairs were just and reasonable
within the meaning of § 205. In particular, it pointed to
reports that lobbyists engaged by ISO-NE had filed with the
U.S. Congress under § 5 of the Lobbying Disclosure Act of
1995 (2 U.S.C. §§ 1601–1612 at § 1604), as well as
comparable reports filed under state law. BRT argued that
these filings showed that ISO-NE’s proposed charges included
lobbying costs, which BRT said were not permitted under
FERC’s own precedent and regulations, and that FERC
approval in effect compelled subsidization of speech in
contravention of the First Amendment.
In response to BRT’s complaints, FERC sua sponte
ordered a “paper hearing” in which it directed ISO-NE to
“clarify the nature of each activity listed in the ‘lobbying
reports’ filed by protestors and explain how each of the
activities cited by protestors is an educational, informational,
or monitoring activity on the one hand, or a lobbying activity
on the other.” ISO-NE, 115 FERC ¶ 61,332 at P 11 n.8
(2006). ISO-NE submitted an almost 800-page filing,
comprised of a brief, nine affidavits, and numerous exhibits,
arguing that all of its communications with government
officials were “designed to address matters of direct operating
concern,” i.e., “to ensure a reliable bulk-power system and
competitive energy markets.” Brief of ISO-NE on Issues Set
for Paper Hearing 5, Joint Appendix (“J.A.”) 993.
The Commission rejected BRT’s substantive objections,
but in a move to enhance transparency ordered ISO-NE to
“prepare and post on its website a monthly report concerning
‘external affairs’ and ‘corporate communications.’” ISO-NE,
117 FERC ¶ 61,070 at P 52 (2006). On rehearing it made
clear that the monthly posting did not have to include certain

-- 5 of 17 --

6
ISO-NE communications, such as “inquiries to or from
executive branch officials” and the provision of “information
to state and federal, executive and legislative officials
regarding the status of New England’s bulk-power system.”
ISO-NE, 118 FERC ¶ 61,105 at P 39.
On appeal BRT challenges FERC’s decision to uphold
both the 2005 tariff (Docket No. 05-1210) and the 2006 tariff
(Docket No. 06-1144). Before proceeding to the merits, a
brief bit of procedural housekeeping is in order. FERC argues
that BRT waived its challenge to the 2005 tariff because it
failed to advance arguments specific to the 2005 tariff in its
opening brief. BRT responds that its arguments against the
2006 orders were equally applicable, and clearly intended to
apply with equal force, to the 2005 orders. Since we reject
BRT’s attacks on FERC’s orders covering the 2006 tariff, we
need not reach the question of waiver. As to Docket No. 04-
1335, BRT admits in its opening brief that it was not briefing
the sole issue that it would have raised in that appeal, see Petr.
Br. 1 n.2, and accordingly, that petition for review is
dismissed with prejudice. See World Wide Minerals, Ltd v.
Republic of Kazakhstan, 296 F.3d 1154, 1160 (D.C. Cir.
2002). Similarly, as the Massachusetts Municipal Wholesale
Electric Company elected not to brief the matters in Docket
No. 05-1212, see Notice of Petitioner Massachusetts
Municipal Wholesale Electric Company Regarding Briefing 1
(Mar. 31, 2008), we dismiss the petition in that docket.
* * *
Apart from the First Amendment challenge, we review
FERC’s orders under the familiar arbitrary and capricious
standard. Midwest ISO Transmission Owners, 373 F.3d at
1368 (citing 5 U.S.C. § 706(2)(A)). This requires that we be
persuaded that the Commission has made a reasoned decision

-- 6 of 17 --

7
based upon substantial evidence and that the path of its
reasoning is clear. NSTAR Electric, 481 F.3d at 802.
In approving ISO-NE’s rates FERC articulated a line
between what we may loosely call informational lobbying
(recoverable) and more political variants (not recoverable).
On the non-recoverable side of the line it identified “activities
such as participation in Political Action Committees,
candidate fundraising, entertainment expenses (e.g., meals,
sporting events, junkets) [as] clearly not recoverable lobbying
activities.” ISO-NE, 117 FERC ¶ 61,070 at P 41. In contrast,
it said that “informational and educational activities as well as
monitoring and communicating on issues of direct operating
concern to the RTO, such as those described by ISO-NE in the
present proceeding, are much harder cases,” id., which in fact
it approved.
BRT asserts two primary reasons to convince us that
FERC’s approval of the rates as just and reasonable was not
based on reasoned decisionmaking: (1) FERC’s alleged
violation of its own precedent; and (2) its alleged blindness to
the possibility that an ISO might pursue goals different from
those sought by members, in particular goals not shared by all
members.
BRT claims that FERC’s precedent broadly disallowed
recovery for lobbying expenditures, even if informational and
related to ISO-NE’s core purposes and objectives. FERC
acknowledged that its prior statements on the subject had “not
always been clear.” Id. at P 47. This appears quite true. On
the one hand is a case cited by BRT, Delmarva Power & Light
Co., 58 FERC ¶ 61,169 (1992), order on reh’g, 58 FERC ¶
61,282 (1992), further order on reh’g, 59 FERC ¶ 61,169
(1992), in which FERC asserted that a utility’s lobbying
expenses, made in the form of contributions to lobbying
activity by Edison Electric Institute, “may not, under any

-- 7 of 17 --

8
circumstances, be included in the utility’s cost of service.”
Delmarva, 58 FERC ¶ 61,169 at 61,509. On the other hand,
not long after Delmarva FERC approved the decision of an
administrative law judge that allowed for lobbying
expenditures where a utility demonstrated that “lobbying
related to proposed legislation . . . could benefit . . .
ratepayers.” Williams Natural Gas Company, 73 FERC
¶ 63,015, at 65,072–73 (1995), order on initial decision, 77
FERC ¶ 61,277 (1996), order on reh’g, 80 FERC ¶ 61,158
(1997).
Moreover, FERC’s accounting rules have quite clearly
left these issues somewhat up in the air. FERC (or more
precisely, its predecessor, the Federal Power Commission)
had recognized that “political expenditures of utilities fall into
a peculiar category” and that it would possibly be “unfair” if
such expenditures were presumed recoverable in all instances.
Alabama Power Co., 24 FPC 278, 286 (1960), reh’g denied,
Alabama Power Co., 24 FPC 860 (1960), aff’d, Southwestern
Elec. Power Co. v. Fed. Power Commission, 304 F.2d 29 (5th
Cir. 1962). As a result, the FPC had required that certain
utility expenditures, such as advertising to promote legislation
or influence public opinion, be isolated in a special account
and thus identified for agency review. In defending this
procedure, the FPC had explained that location in that account
was definitely not the same as preclusion from recovery.
“Thus this accounting classification, while isolating and
identifying these controversial expenditures, appropriately
avoids any implication that the companies are entitled without
a further showing to charge against the rate payer the cost of
political programs favored by the companies but possibly
opposed by those who must pay the costs of supporting these
enterprises.” Id. at 286–87 (emphases added). The present-
day version of the account is No. 426.4. See Expenditures for
Political Purposes—Amendment of Account 426, Other
Income Deductions, Uniform System of Accounts, and Report

-- 8 of 17 --

9
Forms Prescribed for Electric Utilities and Licensees and
Natural Gas Companies—FPC Forms Nos. 1 and 2, 30 FPC
1539, 1541 (1963) (“We note also that such classification
does not constitute a determination that such expenditures
should be excluded from a utility’s cost of service in rate
proceedings.”), order on reh’g, 31 FPC 411 (1964).
Given the Commission’s having expressly left open the
consequences of placing an expense in Account No. 426.4, it
was quite logical, and no diversion from any clear prior
pattern, that the Commission here “did not attempt to identify
which expenditures should have been classified as lobbying in
Account 426.4 because little purpose would be served, in light
of our determination that all of the expenses were properly
recoverable.” ISO-NE, 118 FERC ¶ 61,105 at P 17 (emphasis
in original). The same is true, of course, of expenditure
reports that ISO-NE’s consultants were required to file with
Congress under the Lobbying Disclosure Act of 1995, and
similar state provisions.
BRT’s second attack on FERC’s reasoning points to
FERC’s statement that “ISO-NE has no interest in obtaining a
profit from its operations and seeks only to provide reliable
service at the lowest reasonable cost.” ISO-NE, 118 FERC
¶ 61,105 at P 21. BRT finds this a Pollyannaish view, and
observes that there may well be other factors, such as the
desire for institutional prestige or ideological biases, “or even
a good faith but mistaken belief in the merits of a particular
program,” Petr. Br. 30, that might lead ISO-NE to sacrifice
the interests of its constituents. Moreover, it notes the
obvious fact that the interests of those constituents may
conflict.
If FERC’s ruling below were based entirely on an
assumption that ISO-NE must invariably operate in the best
interests of its stakeholders solely because it is a non-profit

-- 9 of 17 --

10
entity, then we would be inclined to agree with BRT’s
criticism. Rent-seeking and shirking are surely not confined
to for-profit firms. But FERC was hardly as naive as BRT
depicts.
First, FERC candidly acknowledged that because ISO-NE
was charged with providing system reliability and competitive
markets for “all market participants,” this “necessarily has
(and will) result in ISO-NE advocating positions that may be
contrary to [those of] some of its individual members.” ISO-
NE, 118 FERC ¶ 61,105 at P 18 (emphasis added). FERC
observed that the disputed communications involved in the
present case “involved controversial issues on which
consensus among market participants in New England, each
with their own financial interests, was not possible to
achieve.” Id. It concluded, however, that this lack of
consensus “should not preclude ISO-NE from providing its
position on issues affecting the New England electricity
markets to various officials, including legislators and those in
the executive branches of government, who need, and often
seek out, ISO-NE as an independent informational resource.”
Id. Given the potential impingement of government action on
all stakeholders, we can see nothing arbitrary in FERC’s
facilitating ISO-NE’s efforts to express its perceptions even in
the absence of stakeholder unanimity, and even on “highly
controversial subject matters.” ISO-NE, 117 FERC ¶ 61,070
at P 49.
Nor do we see anything unreasonable in FERC’s
classification of communications for which recovery was
proper. ISO-NE plays a critical role in the administration of
New England’s power markets and it seems eminently
reasonable to encourage legislature access to such an
informational resource. Similarly, FERC’s conclusion
allowing recovery of ISO-NE’s costs in monitoring legislative

-- 10 of 17 --

11
activity, so that it may consider how such activity might affect
its operations, appears quite reasonable.
In attacking FERC’s remark about ISO-NE’s absence of
profit motive, and the suggestion that it “seeks only to provide
reliable service at the lowest reasonable cost,” BRT points to
NSTAR Electric & Gas Corp., where we said that FERC had
failed to identify “incentives driving ISO-NE to bargain for
low prices.” 481 F.3d at 803. But there FERC appeared to
have abdicated its role of verifying the reasonableness of
prices paid by an ISO. Here FERC did investigate the
expenditures in question (there is no claim that they were
extravagant), reviewing mounds of material from ISO-NE,
and found that “no party has provided any evidence that ISO-
NE has acted imprudently or contrary to its core purpose and
objectives.” ISO-NE, 118 FERC ¶ 61,105 at P 21. BRT’s
allegation that FERC could act in neglect of its members’
aggregated interests appears irrelevant in light of this finding.
BRT’s remaining non-constitutional claim is that FERC
lacked substantial evidence for its conclusion that ISO-NE’s
expenditures really did fit on the recoverable side of the line
FERC drew. Specifically, BRT argues that FERC’s
conclusion is undermined by its reliance on what BRT calls
ISO-NE’s “characterizations” of its communications with
governmental bodies, and its decision to proceed by paper
hearing.
In fact ISO-NE submitted a detailed mass of its actual
communications, in the form of speeches, correspondence,
PowerPoint presentations and hand-outs. These
communications add up to nearly 600 pages, J.A. 1077–1661,
and are introduced with a 35-page affidavit by ISO-NE’s
Director of External Affairs, Carolyn O’Connor, J.A. 1041–
75. Far from being characterizations, these are ISO-NE’s
communications. BRT gives us no reason to think there have

-- 11 of 17 --

12
been any material omissions, with the possible exception of
ISO-NE’s relations with FERC itself.
As to those relations, FERC noted that ISO-NE was
entitled, like any other utility, to meet with the Commission
and other regulators to pursue its legitimate interests. It said,
“ISO-NE’s contacts with the Commission are strictly
regulatory in nature; it is appropriate for ISO-NE as a public
utility to recover costs of regulatory contacts.” ISO-NE, 118
FERC ¶ 61,105 at P 30. FERC’s own guidelines entitle ISO-
NE “to meet with the Commission . . . to pursue its legitimate
interests and to recover the expenses associated with such
activities.” Id. (citing 18 C.F.R. Part 101, Account No. 928
(2006)). And Account 426.4 also explicitly excludes
“expenditures which are directly related to appearances before
regulatory . . . bodies in connection with the reporting utility’s
existing or proposed operations.” See Expenditures for
Political Purposes-Amendment of Account 426, 30 FPC 1539,
1540 (1963) (internal quotations omitted). Thus, unlike other
government communications expenditures, FERC’s guidelines
already provided that dealings with FERC generally need not
be subject to increased scrutiny. The mere possibility that
ISO-NE could have inappropriately dealt with FERC, which
would be inconsistent with the evidence on its dealings with
other governmental bodies, neither undermines FERC’s
conclusions nor calls for additional procedures beyond the
“paper hearing.” See Central Maine Power Co. v. FERC, 252
F.3d 34, 46–47 (D.C. Cir. 2001) (gathering cases where courts
have approved “hearings by affidavit and nothing more” so
long as any “genuine issues of material fact can be adequately
resolved on the written record” (internal quotations omitted)).

-- 12 of 17 --

13
* * *
BRT argues next that even if FERC’s holding was
reasonable in light of its precedent and the evidence, FERC’s
decision that BRT and ISO-NE’s other customers must pay
for ISO-NE’s external affairs expenditures contravenes the
First Amendment’s prohibition of compelled speech.
In rejecting BRT’s claim, the Commission held both that
there was no state action, the essential predicate for
application of the compelled speech doctrine, ISO-NE, 114
FERC ¶ 61,315 at P 26, and also that, even if there were state
action, ISO-NE’s disputed communications were “germane”
to the goals for which it had been created, so that the
Commission could lawfully approve the charges without
providing dissenters an opt-out right or other remedy, id. at P
39.
We pass on the state action issue. On that, FERC relied
on the Supreme Court’s decision in Jackson v. Metropolitan
Edison Co., 419 U.S. 345 (1974), in which the Court found no
state action in state courts’ enforcement of a tariff filed by a
heavily regulated utility enjoying a state-sanctioned monopoly
over the provision of electricity. Id. at 351–52; ISO-NE, 114
FERC ¶ 61,315 at P 26. On the other hand, the Court held
soon after, in Abood v. Detroit Board of Education, 431 U.S.
209 (1977), that where a state conditioned state employment
on membership in a union, it could not, consistently with the
First Amendment, allow the union to coerce dues payments to
fund the expression of political or ideological views “not
germane to [the union’s] duties as collective-bargaining
representative.” Id. at 235–36. Jackson was not a First
Amendment case, though we are uncertain whether the
concept of state action varies with the specific right at stake.
In any event, under Abood and kindred cases, a government
may adopt rules making it very costly for a person to avoid

-- 13 of 17 --

14
membership in a group, and yet allow the group to charge
members (including dissenters) for the costs of expressing
views “germane” to the group’s mission. See, e.g., Keller v.
State Bar of Cal., 496 U.S. 1, 13 (1990). Given the possibility
that customers of a government-sanctioned monopoly might
be regarded as analogous, we will assume state action
arguendo and move directly to germaneness.
Expenditures are “germane” to an organization’s purpose
where they “are necessarily or reasonably incurred for the
purpose” of the organization. Id. at 14 (quoting Ellis v.
Railway Clerks, 466 U.S. 435, 448 (1984)). BRT’s argument
here largely replicates its earlier contentions about FERC’s
understanding of ISO-NE’s incentives. It argues that the
finding of germaneness rests on the “untenable fiction that
ISO-NE’s interests do not diverge from those of its customers
because it does not have a profit motive.” Petr. Br. 45. Again
it notes our observation in NSTAR, 481 F.3d at 803, that
FERC had not identified incentives inducing ISO-NE to
bargain for low prices.
The argument fails for the same reason that it did in the
prior context: FERC did not merely assume that any and all
expenditures would be germane to ISO-NE’s mission, but
reviewed and analyzed the actual content of ISO-NE’s
communications. BRT harps on ISO-NE’s having adopted
some highly contentious positions, but fails to show why they
must be perceived as outside its mission. For example, it
points to ISO-NE’s position on locational installed capacity
and proposed mergers of grid operators as issues that “became
controversial largely because ISO-NE is notoriously cost
indifferent.” See Petr. Br. 29. But FERC directed ISO-NE to
develop a locational capacity proposal, see Devon Power
LLC, 103 FERC ¶ 61,082 at P 37 (2003), order on reh’g, 104
FERC ¶ 61,123 (2003), and at one point directed ISO-NE to
attempt to merge with other system operators in the Northeast,

-- 14 of 17 --

15
see Regional Transmission Organizations, 96 FERC ¶ 61,065
at P 61, 282 (2001) (“the Commission concludes that it is
necessary that the three independent system operators in the
Northeastern United States combine to form one Regional
Transmission Organization”), though it later vacated that
order because of subsequent events, RTO Informational
Filings, 104 FERC ¶ 61,296 at PP 5–7 (2003). No matter
what BRT thinks of the positions ISO-NE ultimately adopted
on these measures, the fact that FERC at one point thought
them necessary to the efficient administration of New
England’s power markets is strong evidence that they are
germane to ISO-NE’s mission. Above all, FERC analyzed the
content of ISO-NE’s communications on various issues,
including locational installed capacity, before concluding that
“in providing information on these subjects, ISO-NE was
attempting to benefit its market participants.” ISO-NE, 117
FERC ¶ 61,070 at P 49 & n.70.
Thus it is simply not the case that FERC rested its
germaneness finding on an assumption that ISO-NE, as a non-
profit entity, necessarily worked in the aggregate interests of
its customers. Rather, the conclusion was based on its
appraisal of the communications in the light of ISO-NE’s role
in the administration of New England’s power supply. We
agree with FERC that the approval of ISO-NE’s rates did not
violate the First Amendment.
* * *
Finally, we turn to BRT’s argument that FERC abused its
discretion in making clear that its requirement of monthly
website disclosures did not encompass “briefings, responses
to inquiries, and similar activities” by ISO-NE. ISO-NE, 118
FERC ¶ 61,105 at P 39. Perhaps because of the multiplicity
of potentially relevant factors and the broad range of choices,

-- 15 of 17 --

16
we approach agencies’ decisions on remedies with exceptional
deference. See, e.g., Louisiana Public Service Commission v.
FERC, 522 F.3d 378, 393 (D.C. Cir. 2008); Niagara Mohawk
Power Corp. v. FPC, 379 F.2d 153, 159 (D.C. Cir. 1967).
FERC’s theory in excluding such communications was
that they were “an integral part of ISO-NE’s regulatory or
public informational responsibilities and therefore, should not
be fettered by additional reporting requirements.” ISO-NE,
118 FERC ¶ 61,105 at P 39. BRT argues on appeal that
because FERC has admitted that the dividing line between
educational and informational expenditures on the one hand
and lobbying expenditures on the other is not clear, FERC’s
reporting mandate should be broader, so as to provide the
transparency necessary to protect ISO-NE’s customers from
excess charges.
In light of the substantial deference afforded FERC in this
matter, we find that FERC’s proposed remedy is reasonable.
In its clarification order FERC recognized that the distinction
between types of external communications was not easy to
draw, and hence refused to allow ISO-NE’s own
categorization of expenses as either “external affairs” or
“corporate communications” to determine what was included
in the monthly reporting requirements. Id. at P 41.
Furthermore, the communications FERC excluded from the
reporting requirement included such activities as “questions
from Commission staff about uncontested ISO filings” and
“providing information to state and federal, executive and
legislative officials regarding the status of New England’s
bulk-power system.” Id. at P 39. Such exclusions would
presumably still require reporting of any meetings ISO-NE is
involved in that could promote specific legislation or policy
initiatives, which are the primary types of communication
BRT seems to find objectionable. Finally, FERC explained
that the purpose of its initial order was not to provide

-- 16 of 17 --

17
exhaustive lists of information, but rather “to provide
stakeholders information regarding the nature of activities
undertaken by ISO-NE and, therefore, the opportunity to seek
further information from ISO-NE.” Id. at P 42. FERC thus
imposed on ISO-NE the expectation that, “if requested, ISO-
NE will provide copies of any documents that it prepared for
or distributed at meetings with public officials.” Id.
As clarified, FERC’s posting directive appears to be a
reasonable balance of competing interests. ISO-NE has to
disclose the most objectionable forms of communications, but
will not be unduly bogged down with requirements likely to
prove pointless. And of course, if the remedy proves
inadequate or ISO-NE fails to comply, BRT is free to pursue
additional remedies with FERC.
* * *
The appeals in Nos. 04-1335 and 05-1212 are dismissed
(see supra at 6), and FERC’s orders approving ISO-NE’s
tariffs for 2005 and 2006 are
Affirmed.

-- 17 of 17 --