{ "attribution": { "source": "legal.exploreworldai.com", "canonical": "https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cadc-25-1060-2026-10-02", "cite_as": "NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cadc-25-1060-2026-10-02)", "license": "https://legal.exploreworldai.com/revision", "version": "legal-2026-10-05", "fingerprint": "ewai:se:5aa9a2", "proof": "sha256:bb9c30278052c1c3640aec054eb74028ce67709a6e4ad75026da071e5ac20485", "jurisdiction": "se", "lang": "en", "publisher": "NovaCopilot by ExploreWorld Legal", "terms": "https://legal.exploreworldai.com/om" }, "brand_source": "Source: NovaCopilot", "brand": { "product": "NovaCopilot", "platform": "ExploreWorldAI", "infrastructure": "ExploreWorld Legal", "infrastructure_url": "legal.exploreworldai.com", "legal_entity": "Valkiv Ventures AB", "permanent_url": "https://legal.exploreworldai.com/novacopilot", "source": "Source: NovaCopilot", "powered_by": "Powered by NovaCopilot", "license": "https://legal.exploreworldai.com/licensvillkor", "contact": "stig@valkiv.com" }, "item": { "schema_version": "1.0.0", "id": "us:cadc-25-1060-2026-10-02", "jurisdiction": "us", "lang": "en", "brand_source": "Source: NovaCopilot", "brand": { "product": "NovaCopilot", "platform": "ExploreWorldAI", "infrastructure": "ExploreWorld Legal", "infrastructure_url": "legal.exploreworldai.com", "legal_entity": "Valkiv Ventures AB", "permanent_url": "https://legal.exploreworldai.com/novacopilot", "source": "Source: NovaCopilot", "powered_by": "Powered by NovaCopilot", "license": "https://legal.exploreworldai.com/licensvillkor", "contact": "stig@valkiv.com" }, "sections": [ { "title": "United States Court of Appeals", "paragraphs": [] }, { "title": "FOR THE DISTRICT OF COLUMBIA CIRCUIT", "paragraphs": [] }, { "title": "Argued April 20, 2026 Decided October 2, 2026", "paragraphs": [] }, { "title": "No. 25-1060", "paragraphs": [ "para_5" ] }, { "title": "PETITIONER", "paragraphs": [ "para_7", "para_8" ] }, { "title": "RESPONDENT", "paragraphs": [ "para_10", "para_11" ] }, { "title": "INTERVENORS", "paragraphs": [] }, { "title": "Consolidated with 25-1130", "paragraphs": [] }, { "title": "On Petitions for Review of Orders of the", "paragraphs": [] }, { "title": "Federal Energy Regulatory Commission", "paragraphs": [] }, { "title": "Jesse Halpern argued the cause for petitioner. With her", "paragraphs": [ "para_17", "para_18" ] }, { "title": "Misha Tseytlin argued the cause for intervenor-petitioner", "paragraphs": [ "para_20" ] }, { "title": "2", "paragraphs": [ "para_22", "para_23" ] }, { "title": "J. Houston Shaner, Attorney, Federal Energy Regulatory", "paragraphs": [] }, { "title": "Commission, argued the cause for respondent. With him on", "paragraphs": [ "para_26" ] }, { "title": "H. Solomon, Solicitor. Carol J. Banta, Attorney, entered an", "paragraphs": [ "para_28" ] }, { "title": "Nicole A. Travers argued the cause for intervenor-", "paragraphs": [ "para_30", "para_31", "para_32", "para_33" ] }, { "title": "CHILDS, Circuit Judge: In the early 1930s, rural", "paragraphs": [ "para_35", "para_36", "para_37" ] }, { "title": "1363 (codified at 7 U.S.C. § 901 et seq.). The Act", "paragraphs": [ "para_39", "para_40", "para_41", "para_42", "para_43", "para_44" ] }, { "title": "Petitioner Basin Electric Power Cooperative (Basin) is one", "paragraphs": [ "para_46", "para_47" ] }, { "title": "Tri-State Generation and Transmission Association (Tri-State)", "paragraphs": [ "para_49", "para_50" ] }, { "title": "3", "paragraphs": [ "para_52", "para_53" ] }, { "title": "This case concerns the proper interpretation of the", "paragraphs": [ "para_55" ] }, { "title": "Basin/Tri-State Agreement). Specifically, we must decide", "paragraphs": [ "para_57", "para_58" ] }, { "title": "The Federal Energy Regulatory Commission (the", "paragraphs": [] }, { "title": "Commission) held that Northwest Rural’s withdrawal from", "paragraphs": [] }, { "title": "Tri-State would not breach the Basin/Tri-State Agreement", "paragraphs": [ "para_62", "para_63", "para_64" ] }, { "title": "Because we agree with the Commission’s interpretation of the", "paragraphs": [] }, { "title": "Basin/Tri-State Agreement, we deny Basin’s petitions for", "paragraphs": [ "para_67", "para_68", "para_69" ] }, { "title": "Basin is a not-for-profit, member-owned electric", "paragraphs": [ "para_71", "para_72", "para_73", "para_74" ] }, { "title": "South Dakota, and Wyoming. As a cooperative, Basin is", "paragraphs": [ "para_76", "para_77", "para_78", "para_79", "para_80" ] }, { "title": "4", "paragraphs": [] }, { "title": "Tri-State is one of Basin’s members. Tri-State is also a", "paragraphs": [ "para_83", "para_84", "para_85" ] }, { "title": "Tri-State buys electric energy wholesale from Basin and then", "paragraphs": [ "para_87", "para_88", "para_89", "para_90" ] }, { "title": "Northwest Rural is one of Tri-State’s Eastern", "paragraphs": [] }, { "title": "Interconnection members. Northwest Rural distributes the", "paragraphs": [ "para_93", "para_94", "para_95", "para_96", "para_97", "para_98", "para_99", "para_100", "para_101" ] }, { "title": "One such contract governs the sale and transfer of energy", "paragraphs": [ "para_103" ] }, { "title": "State/Northwest Agreement). The Tri-State/Northwest", "paragraphs": [] }, { "title": "Agreement obligates Northwest Rural to purchase nearly all its", "paragraphs": [ "para_106", "para_107", "para_108" ] }, { "title": "Tri-State’s Bylaws provide that a member like Northwest", "paragraphs": [] }, { "title": "Rural “seeking early termination” of its agreement with Tri-", "paragraphs": [] }, { "title": "State and withdrawal from Tri-State “may do so only upon", "paragraphs": [ "para_112" ] }, { "title": "5", "paragraphs": [] }, { "title": "See id. (citing Tri-State Bylaws). The Bylaws further", "paragraphs": [ "para_115", "para_116", "para_117" ] }, { "title": "Bylaws). Yet per Tri-State’s Rate Schedule No. 281, “Tri-", "paragraphs": [] }, { "title": "State’s Board of Directors has no discretion to prevent a", "paragraphs": [ "para_120", "para_121", "para_122", "para_123", "para_124", "para_125" ] }, { "title": "A separate contract, the Basin/Tri-State Agreement, to", "paragraphs": [ "para_127", "para_128", "para_129", "para_130", "para_131" ] }, { "title": "Member-Systems’ loads in the Eastern Interconnection”", "paragraphs": [ "para_133", "para_134", "para_135", "para_136", "para_137", "para_138" ] }, { "title": "In April 2022, Northwest Rural submitted to Tri-State a", "paragraphs": [ "para_140", "para_141" ] }, { "title": "EL21-75-000, ER21-2818-000, and EL22-4-000, the parties litigated", "paragraphs": [ "para_143", "para_144", "para_145" ] }, { "title": "6", "paragraphs": [] }, { "title": "State membership and terminate the Tri-State/Northwest", "paragraphs": [ "para_148" ] }, { "title": "Basin responded by initiating litigation against Tri-State in", "paragraphs": [ "para_150", "para_151", "para_152" ] }, { "title": "Northwest Rural would pay to Tri-State for withdrawing its", "paragraphs": [ "para_154", "para_155" ] }, { "title": "Interconnection member from terminating their [agreements]", "paragraphs": [ "para_157" ] }, { "title": "Generation & Transmission Ass’n, No. 3:21-CV-220, 2022", "paragraphs": [ "para_159" ] }, { "title": "The district court dismissed Basin’s complaint without", "paragraphs": [ "para_161" ] }, { "title": "Id. at *11. In that proceeding, the Commission issued an order", "paragraphs": [ "para_163", "para_164", "para_165" ] }, { "title": "Eastern Interconnection members, like Northwest Rural, to", "paragraphs": [ "para_167" ] }, { "title": "FERC ¶ 61,201, at P 554 n.900 (2023).2 As the Commission", "paragraphs": [ "para_169", "para_170" ] }, { "title": "State Agreement are distinct issues. Tri-State Generation &", "paragraphs": [ "para_172" ] }, { "title": "Thus, any potential breach of the Basin/Tri-State Agreement", "paragraphs": [] }, { "title": "2 The Tenth Circuit ultimately denied Tri-State’s petitions", "paragraphs": [ "para_175" ] }, { "title": "Commission’s decisions adopting the exit-fee methodology were", "paragraphs": [ "para_177", "para_178" ] }, { "title": "7", "paragraphs": [ "para_180", "para_181" ] }, { "title": "Basin subsequently filed another complaint in the District", "paragraphs": [ "para_183" ] }, { "title": "Rural’s withdrawal from Tri-State would constitute a breach by", "paragraphs": [ "para_185", "para_186", "para_187" ] }, { "title": "2024). After the district court denied Basin’s motion for a", "paragraphs": [ "para_189", "para_190" ] }, { "title": "Basin submitted a notice of voluntary dismissal of its complaint", "paragraphs": [ "para_192", "para_193", "para_194", "para_195", "para_196" ] }, { "title": "In March 2024, Northwest Rural filed a complaint with the", "paragraphs": [] }, { "title": "Commission against Basin and Tri-State pursuant to sections", "paragraphs": [ "para_199" ] }, { "title": "825e, 825h, and also pursuant to Rule 206 of the Federal", "paragraphs": [] }, { "title": "Energy Regulatory Commission’s Rules of Practice and", "paragraphs": [] }, { "title": "Procedure, 18 C.F.R. § 385.206. Northwest Rural’s", "paragraphs": [ "para_203", "para_204" ] }, { "title": "Agreement, (2) the Commission “hold that [Northwest", "paragraphs": [] }, { "title": "Rural]’s withdrawal from Tri-State is permissible” under the", "paragraphs": [] }, { "title": "Basin/Tri-State Agreement, and (3) to the extent the Basin/Tri-", "paragraphs": [ "para_208", "para_209", "para_210", "para_211" ] }, { "title": "8", "paragraphs": [ "para_213", "para_214", "para_215" ] }, { "title": "The Commission first found it appropriate to exercise", "paragraphs": [ "para_217", "para_218", "para_219", "para_220", "para_221" ] }, { "title": "Turning to the merits, the Commission found that", "paragraphs": [] }, { "title": "Northwest Rural’s withdrawal from Tri-State would not", "paragraphs": [ "para_224" ] }, { "title": "P 73. In so concluding, the Commission rejected Basin’s", "paragraphs": [ "para_226" ] }, { "title": "State was, in effect, the same as Tri-State’s withdrawal from", "paragraphs": [] }, { "title": "Basin. Id. Although section 14 of the Basin/Tri-State", "paragraphs": [] }, { "title": "Agreement did not provide any means for Tri-State’s", "paragraphs": [ "para_230", "para_231", "para_232" ] }, { "title": "Commission ruled, section 9 governed Tri-State’s obligations", "paragraphs": [ "para_234", "para_235" ] }, { "title": "Considering the plain language of section 9, the", "paragraphs": [] }, { "title": "Commission found Tri-State’s Agreement with Northwest", "paragraphs": [ "para_238" ] }, { "title": "The Commission further determined that the second and third", "paragraphs": [ "para_240", "para_241", "para_242", "para_243", "para_244" ] }, { "title": "9", "paragraphs": [ "para_246" ] }, { "title": "Basin’s approval, without breaching the Basin/Tri-State", "paragraphs": [] }, { "title": "Agreement. Id. at P 77. Accordingly, so long as Tri-State", "paragraphs": [ "para_249", "para_250", "para_251", "para_252" ] }, { "title": "The Commission also rejected Basin’s reliance on federal", "paragraphs": [ "para_254", "para_255", "para_256", "para_257", "para_258", "para_259", "para_260" ] }, { "title": "Northwest Rural is not a party to the Basin/Tri-State", "paragraphs": [] }, { "title": "Agreement and does not have an all-requirements contract with", "paragraphs": [] }, { "title": "Basin. Id. Thus, Basin’s authorities would only pertain to", "paragraphs": [ "para_264", "para_265" ] }, { "title": "Commission noted, Tri-State is “not affirmatively trying to", "paragraphs": [ "para_267", "para_268", "para_269", "para_270", "para_271", "para_272", "para_273", "para_274" ] }, { "title": "Such cases prohibiting early termination by a contracting party", "paragraphs": [ "para_276", "para_277", "para_278" ] }, { "title": "10", "paragraphs": [] }, { "title": "Finally, given its determination that “Northwest Rural’s", "paragraphs": [ "para_281", "para_282", "para_283", "para_284" ] }, { "title": "Shortly after the Commission’s Order finding that", "paragraphs": [] }, { "title": "Northwest Rural’s withdrawal from Tri-State does not violate", "paragraphs": [ "para_287" ] }, { "title": "State of its intent to withdraw from Tri-State, effective January", "paragraphs": [ "para_289" ] }, { "title": "Basin petitioned for rehearing. Though the Commission", "paragraphs": [ "para_291" ] }, { "title": "Basin’s arguments in its rehearing petition, it arrived at the", "paragraphs": [ "para_293", "para_294", "para_295" ] }, { "title": "First, the Commission rejected Basin’s argument that it", "paragraphs": [ "para_297", "para_298", "para_299", "para_300", "para_301", "para_302", "para_303" ] }, { "title": "Agreement § 9) (citation modified). The Commission", "paragraphs": [ "para_305", "para_306", "para_307", "para_308" ] }, { "title": "Id. at P 27. By concluding that it would not “because section", "paragraphs": [] }, { "title": "9 of the contract permits Tri-State to dispose of some of its", "paragraphs": [ "para_311" ] }, { "title": "11", "paragraphs": [ "para_313", "para_314", "para_315", "para_316", "para_317" ] }, { "title": "Commission explained only that, “reasonable terms and", "paragraphs": [ "para_319", "para_320", "para_321", "para_322" ] }, { "title": "The Commission also rejected Basin’s assertion that", "paragraphs": [ "para_324" ] }, { "title": "Agreement is functionally the same as allowing Tri-State to", "paragraphs": [ "para_326", "para_327", "para_328" ] }, { "title": "Eastern Interconnection members withdraw from Tri-State, the", "paragraphs": [] }, { "title": "Commission deemed that “hypothetical as outside the scope”", "paragraphs": [ "para_331" ] }, { "title": "Finally, the Commission rejected Basin’s assertion that the", "paragraphs": [ "para_333", "para_334" ] }, { "title": "P 30 (noting that under Nebraska law, unambiguous", "paragraphs": [ "para_336", "para_337", "para_338", "para_339" ] }, { "title": "12", "paragraphs": [] }, { "title": "Basin filed timely petitions for review of the", "paragraphs": [] }, { "title": "Commission’s orders. For the reasons that follow, we deny", "paragraphs": [ "para_343", "para_344" ] }, { "title": "We begin with the Commission’s assertion that we lack", "paragraphs": [ "para_346" ] }, { "title": "Federal Power Act, we have jurisdiction to review petitions", "paragraphs": [ "para_348" ] }, { "title": "16 U.S.C. § 825l(b). “A party is ‘aggrieved’ if it makes ‘the", "paragraphs": [ "para_350", "para_351" ] }, { "title": "Mich. Elec. Transmission Co. v. FERC, 141 F.4th 1296, 1302", "paragraphs": [ "para_353" ] }, { "title": "913 F.3d 127, 136 (D.C. Cir. 2019)). To do so, Basin must", "paragraphs": [ "para_355", "para_356", "para_357", "para_358" ] }, { "title": "The Commission asserts that Basin lacks standing because", "paragraphs": [ "para_360" ] }, { "title": "Basin, making “Basin the prevailing party below.”", "paragraphs": [] }, { "title": "Respondent’s Br. 31. It follows, according to the", "paragraphs": [] }, { "title": "Commission, that Basin was not aggrieved by the", "paragraphs": [ "para_364" ] }, { "title": "4 In ruling on Basin’s petitions, we confine our review to the issues", "paragraphs": [ "para_366", "para_367", "para_368" ] }, { "title": "2025) (noting that intervenors are not “permit[ted]” to “raise an issue", "paragraphs": [ "para_370", "para_371" ] }, { "title": "13", "paragraphs": [] }, { "title": "The Commission is incorrect. To be sure, the", "paragraphs": [] }, { "title": "Commission’s ultimate disposition was to deny Northwest", "paragraphs": [] }, { "title": "Rural’s complaint against Basin. See Complaint Order, 189", "paragraphs": [] }, { "title": "FERC ¶ 61,164, at P 82. But the Commission’s narrow focus", "paragraphs": [ "para_377", "para_378", "para_379", "para_380", "para_381", "para_382", "para_383" ] }, { "title": "We rejected a similar form-over-substance argument in", "paragraphs": [] }, { "title": "Michigan Electric, 141 F.4th at 1302–03. The parties in", "paragraphs": [] }, { "title": "Michigan Electric disagreed over ownership of network", "paragraphs": [ "para_387", "para_388", "para_389", "para_390", "para_391" ] }, { "title": "1301. The proposal assigned ownership of the network", "paragraphs": [ "para_393" ] }, { "title": "Power Agency, and Wolverine Power based on the operator’s", "paragraphs": [ "para_395", "para_396", "para_397", "para_398", "para_399", "para_400", "para_401", "para_402", "para_403", "para_404" ] }, { "title": "14", "paragraphs": [] }, { "title": "Michigan Electric petitioned this court for review of the", "paragraphs": [] }, { "title": "Commission’s decision. The Commission challenged", "paragraphs": [] }, { "title": "Michigan Electric’s standing on the basis that the Commission", "paragraphs": [ "para_409", "para_410" ] }, { "title": "1302. We disagreed, explaining that Michigan Electric was", "paragraphs": [ "para_412", "para_413", "para_414", "para_415", "para_416", "para_417", "para_418", "para_419", "para_420", "para_421", "para_422", "para_423" ] }, { "title": "As such, we ruled that Michigan Electric had standing to seek", "paragraphs": [ "para_425" ] }, { "title": "The same logic applies here. The Commission, on its way", "paragraphs": [ "para_427", "para_428", "para_429", "para_430" ] }, { "title": "Northwest Rural’s complaint specifically asked the", "paragraphs": [] }, { "title": "Commission to “hold that Northwest Rural’s withdrawal from", "paragraphs": [] }, { "title": "Tri-State does not violate the [Basin/Tri-State Agreement].”", "paragraphs": [] }, { "title": "Id. at PP 1, 72. And the Commission granted that request over", "paragraphs": [ "para_435" ] }, { "title": "As a result, Basin faces Northwest Rural’s impending", "paragraphs": [ "para_437", "para_438" ] }, { "title": "15", "paragraphs": [ "para_440" ] }, { "title": "For example, loss of Northwest Rural’s energy demands will", "paragraphs": [ "para_442", "para_443", "para_444", "para_445" ] }, { "title": "9. To be sure, as the Commission points out, Northwest Rural", "paragraphs": [ "para_447", "para_448", "para_449" ] }, { "title": "Respondent’s Br. 39–41; see also Complaint Order, 189 FERC", "paragraphs": [ "para_451" ] }, { "title": "Ass’n, 192 FERC ¶ 61,109, at PP 53–64 (2025) (ruling on", "paragraphs": [ "para_453", "para_454", "para_455", "para_456", "para_457" ] }, { "title": "23 (citing Kern Aff. ¶¶ 9, 12–13). Specifically, Northwest", "paragraphs": [] }, { "title": "Rural’s impending withdrawal in 2027 impacts Basin’s current", "paragraphs": [ "para_460", "para_461", "para_462", "para_463" ] }, { "title": "This harm is not, as the Commission asserts, attenuated or", "paragraphs": [ "para_465", "para_466", "para_467", "para_468", "para_469" ] }, { "title": "Rural’s withdrawal from Tri-State breaches the Basin/Tri-State", "paragraphs": [] }, { "title": "16", "paragraphs": [] }, { "title": "Agreement, Basin has standing to pursue its claim here.5 See", "paragraphs": [ "para_473", "para_474" ] }, { "title": "We review Commission orders under the Administrative", "paragraphs": [] }, { "title": "Procedure Act, which requires us to determine that agency", "paragraphs": [ "para_477", "para_478", "para_479", "para_480" ] }, { "title": "In reviewing the Commission’s interpretation of a", "paragraphs": [ "para_482", "para_483", "para_484" ] }, { "title": "(D.C. Cir. 2024) (quoting Okla. Gas & Elec. Co. v. FERC, 11", "paragraphs": [] }, { "title": "F.4th 821, 827 (D.C. Cir. 2021)). Where, as here, the parties", "paragraphs": [ "para_487", "para_488", "para_489", "para_490", "para_491" ] }, { "title": "5 After the case was submitted, the court received information that", "paragraphs": [] }, { "title": "Basin Electric and Northwest Rural resolved their dispute regarding", "paragraphs": [] }, { "title": "Northwest Rural’s exit from Tri-State. The court also learned that", "paragraphs": [ "para_495", "para_496", "para_497" ] }, { "title": "Agreement affects any Eastern Interconnection member’s attempt to", "paragraphs": [ "para_499" ] }, { "title": "6 The parties agree that the relevant provisions in the Basin/Tri-", "paragraphs": [] }, { "title": "State Agreement are unambiguous. See Petitioner’s Br. 43; Oral", "paragraphs": [ "para_502" ] }, { "title": "17", "paragraphs": [ "para_504" ] }, { "title": "The provisions in the Basin/Tri-State Agreement “must be", "paragraphs": [ "para_506", "para_507" ] }, { "title": "The crux of this case is the proper interpretation of section 9 of", "paragraphs": [ "para_509" ] }, { "title": "Tri-State shall not without the approval in", "paragraphs": [ "para_511", "para_512", "para_513", "para_514" ] }, { "title": "Interconnection . . . . Notwithstanding the", "paragraphs": [ "para_516", "para_517", "para_518", "para_519", "para_520", "para_521" ] }, { "title": "Interconnection . . . so long as Tri-State shall", "paragraphs": [ "para_523", "para_524", "para_525", "para_526", "para_527", "para_528" ] }, { "title": "Notwithstanding the foregoing, no such", "paragraphs": [ "para_530", "para_531", "para_532", "para_533", "para_534", "para_535" ] }, { "title": "18", "paragraphs": [ "para_537" ] }, { "title": "Section 9 unambiguously supplies Tri-State a mechanism", "paragraphs": [ "para_539" ] }, { "title": "Commission found, Northwest Rural’s withdrawal from and", "paragraphs": [ "para_541", "para_542" ] }, { "title": "Order, 189 FERC ¶ 61,164, at PP 76, 81 (“Northwest Rural, as", "paragraphs": [ "para_544", "para_545", "para_546" ] }, { "title": "And “[n]otwithstanding,” the first sentence of section 9 which", "paragraphs": [ "para_548", "para_549", "para_550", "para_551", "para_552", "para_553", "para_554", "para_555", "para_556", "para_557", "para_558", "para_559", "para_560" ] }, { "title": "Northwest Rural’s withdrawal from Tri-State or constitute a", "paragraphs": [ "para_562", "para_563", "para_564" ] }, { "title": "Resisting this interpretation, Basin asserts several", "paragraphs": [ "para_566", "para_567" ] }, { "title": "Basin asserts that the Commission’s interpretation of", "paragraphs": [] }, { "title": "19", "paragraphs": [ "para_570" ] }, { "title": "State/Northwest Agreement which “has the functional effect”", "paragraphs": [ "para_572" ] }, { "title": "December 31, 2050. Petitioner’s Br. 37. This is so, Basin", "paragraphs": [ "para_574" ] }, { "title": "State could open the door for all six of Tri-State’s Eastern", "paragraphs": [] }, { "title": "Interconnection members to terminate their agreements with", "paragraphs": [] }, { "title": "Tri-State, effectively resulting in complete early termination of", "paragraphs": [ "para_578" ] }, { "title": "Basin, the Commission’s interpretation of section 9 is", "paragraphs": [ "para_580", "para_581" ] }, { "title": "We disagree. The Commission’s interpretation gave", "paragraphs": [ "para_583" ] }, { "title": "Agreement, which governs the “Term” of the contract and", "paragraphs": [ "para_585" ] }, { "title": "December 31, 2050.” Basin/Tri-State Agreement § 14. As", "paragraphs": [ "para_587", "para_588", "para_589", "para_590", "para_591" ] }, { "title": "Further, Tri-State’s transfer of a single asset (Northwest", "paragraphs": [ "para_593" ] }, { "title": "And, as the Commission explained, the “hypothetical” scenario", "paragraphs": [ "para_595", "para_596", "para_597" ] }, { "title": "Thus, contrary to Basin’s assertions, neither the Commission’s", "paragraphs": [] }, { "title": "Order nor its interpretation of section 9 permits Tri-State to", "paragraphs": [ "para_600" ] }, { "title": "Interconnection members as an end run around the section 14", "paragraphs": [ "para_602" ] }, { "title": "20", "paragraphs": [] }, { "title": "Should such a scenario unfold, the Commission can address", "paragraphs": [] }, { "title": "Basin’s arguments pertaining to such a situation in a future", "paragraphs": [ "para_606" ] }, { "title": "376, 381 (D.C. Cir. 1992) (“Surely [the Commission] has as", "paragraphs": [ "para_608", "para_609", "para_610", "para_611" ] }, { "title": "Basin also faults the Commission for not fully engaging", "paragraphs": [ "para_613", "para_614", "para_615", "para_616", "para_617", "para_618", "para_619", "para_620", "para_621", "para_622", "para_623", "para_624", "para_625", "para_626", "para_627", "para_628", "para_629", "para_630" ] }, { "title": "Tri-State]”). As the Commission explained, in ruling on", "paragraphs": [] }, { "title": "Northwest Rural’s complaint it need not “determine the amount", "paragraphs": [] }, { "title": "Tri-State must pay Basin to comply with section 9’s conditions", "paragraphs": [ "para_634", "para_635" ] }, { "title": "191 FERC ¶ 61,087, at P 27. Because the Commission is", "paragraphs": [] }, { "title": "21", "paragraphs": [ "para_638" ] }, { "title": "Ass’n of Am. v. FERC, 285 F.3d 18, 35 (D.C. Cir. 2002), the", "paragraphs": [] }, { "title": "Commission’s reluctance to make determinations beyond the", "paragraphs": [ "para_641", "para_642", "para_643", "para_644", "para_645", "para_646", "para_647", "para_648", "para_649" ] }, { "title": "Additionally, Basin contends that the Commission’s", "paragraphs": [ "para_651", "para_652", "para_653" ] }, { "title": "Agreement provision, determined only that it did “not directly", "paragraphs": [ "para_655", "para_656" ] }, { "title": "FERC ¶ 61,087, at P 29 (citing Tri-State Generation &", "paragraphs": [ "para_658" ] }, { "title": "Importantly, unlike here, the Tri-State/Northwest Agreement", "paragraphs": [ "para_660", "para_661", "para_662" ] }, { "title": "Agreement would be Tri-State’s withdrawal from Basin. But", "paragraphs": [ "para_664", "para_665" ] }, { "title": "Northwest Rural’s withdrawal, in turn, constitutes a transfer of", "paragraphs": [ "para_667", "para_668" ] }, { "title": "22", "paragraphs": [ "para_670" ] }, { "title": "Basin further claims that the Commission’s interpretation", "paragraphs": [ "para_672" ] }, { "title": "Agreement “and rural electric cooperative wholesale power", "paragraphs": [ "para_674", "para_675", "para_676" ] }, { "title": "Commission observed, “[u]nder Nebraska law, where the", "paragraphs": [ "para_678", "para_679", "para_680", "para_681" ] }, { "title": "Order, 191 FERC ¶ 61,087, at P 30 (citing Main St. Props. LLC", "paragraphs": [ "para_683", "para_684" ] }, { "title": "Basin concedes that the Basin/Tri-State Agreement is", "paragraphs": [ "para_686" ] }, { "title": "1:33–1:45. Consequently, the Commission properly declined", "paragraphs": [ "para_688", "para_689", "para_690" ] }, { "title": "Finally, Basin argues that the Commission’s decision is", "paragraphs": [ "para_692", "para_693" ] }, { "title": "Basin points to were binding on the Commission nor are they", "paragraphs": [ "para_695" ] }, { "title": "In Shoshone River Power, Inc., Tri-State asserted that its", "paragraphs": [ "para_697" ] }, { "title": "Shoshone, prevented Shoshone from voluntarily disposing of", "paragraphs": [ "para_699", "para_700", "para_701" ] }, { "title": "23", "paragraphs": [] }, { "title": "Shoshone ha[d] an implied obligation to remain in business and", "paragraphs": [ "para_704" ] }, { "title": "Shoshone’s contractual undertakings necessarily implies the", "paragraphs": [ "para_706", "para_707", "para_708", "para_709", "para_710", "para_711", "para_712" ] }, { "title": "Shoshone does not support Basin’s view. For one, Tri-", "paragraphs": [] }, { "title": "State is not disposing of substantially all of its assets and", "paragraphs": [ "para_715", "para_716", "para_717", "para_718" ] }, { "title": "Tri-State is facing the unavoidable circumstance of one of its", "paragraphs": [ "para_720" ] }, { "title": "Rehearing Order, 191 FERC ¶ 61,087, at P 31. It is", "paragraphs": [] }, { "title": "Northwest Rural’s withdrawal that would reduce Tri-State’s", "paragraphs": [ "para_723", "para_724", "para_725" ] }, { "title": "And neither Dakota Energy Cooperative, Inc. v. East River", "paragraphs": [] }, { "title": "Electric Power Cooperative, Inc., 75 F.4th 870, 875–77 (8th", "paragraphs": [] }, { "title": "Cir. 2023), nor Marlboro Electric Cooperative, Inc. v. Central", "paragraphs": [ "para_729" ] }, { "title": "Mar. 28, 2022), ECF No. 95, offers support to Basin. Both", "paragraphs": [ "para_731", "para_732", "para_733" ] }, { "title": "872; Marlboro Elec., slip op. at 3. Basin’s reliance on these", "paragraphs": [ "para_735" ] }, { "title": "24", "paragraphs": [ "para_737", "para_738", "para_739", "para_740" ] }, { "title": "50. But, as the Commission found, this case arises out of Tri-", "paragraphs": [] }, { "title": "State’s transfer of a single asset—Northwest Rural—not of any", "paragraphs": [ "para_743" ] }, { "title": "Agreement. Dakota Energy and Marlboro Electric are", "paragraphs": [ "para_745", "para_746" ] }, { "title": "The Commission correctly determined that the plain and", "paragraphs": [ "para_748" ] }, { "title": "Northwest Rural to withdraw from Tri-State and thus", "paragraphs": [] }, { "title": "Northwest Rural’s withdrawal does not constitute a breach of", "paragraphs": [ "para_751", "para_752", "para_753", "para_754" ] } ], "paragraphs": [ { "text": "United States Court of Appeals", "paragraph_id": "para_1" }, { "text": "FOR THE DISTRICT OF COLUMBIA CIRCUIT", "paragraph_id": "para_2" }, { "text": "Argued April 20, 2026 Decided October 2, 2026", "paragraph_id": "para_3" }, { "text": "No. 25-1060", "paragraph_id": "para_4" }, { "text": "BASIN ELECTRIC POWER COOPERATIVE,", "paragraph_id": "para_5" }, { "text": "PETITIONER", "paragraph_id": "para_6" }, { "text": "v.", "paragraph_id": "para_7" }, { "text": "FEDERAL ENERGY REGULATORY COMMISSION,", "paragraph_id": "para_8" }, { "text": "RESPONDENT", "paragraph_id": "para_9" }, { "text": "TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION,", "paragraph_id": "para_10" }, { "text": "INC. AND NORTHWEST RURAL PUBLIC POWER DISTRICT,", "paragraph_id": "para_11" }, { "text": "INTERVENORS", "paragraph_id": "para_12" }, { "text": "Consolidated with 25-1130", "paragraph_id": "para_13" }, { "text": "On Petitions for Review of Orders of the", "paragraph_id": "para_14" }, { "text": "Federal Energy Regulatory Commission", "paragraph_id": "para_15" }, { "text": "Jesse Halpern argued the cause for petitioner. With her", "paragraph_id": "para_16" }, { "text": "on the briefs were Rebecca L. Shelton, Nicole S. Allen, Anthony", "paragraph_id": "para_17" }, { "text": "F. Blum, and Jenna Cliatt.", "paragraph_id": "para_18" }, { "text": "Misha Tseytlin argued the cause for intervenor-petitioner", "paragraph_id": "para_19" }, { "text": "Tri-State Generation and Transmission Association, Inc.", "paragraph_id": "para_20" }, { "text": "2", "paragraph_id": "para_21" }, { "text": "With him on the briefs were Frederick Wilson, Kenneth F.", "paragraph_id": "para_22" }, { "text": "Rossman, IV, and Jeff P. Johnson.", "paragraph_id": "para_23" }, { "text": "J. Houston Shaner, Attorney, Federal Energy Regulatory", "paragraph_id": "para_24" }, { "text": "Commission, argued the cause for respondent. With him on", "paragraph_id": "para_25" }, { "text": "the brief were James T. Dawson, General Counsel, and Robert", "paragraph_id": "para_26" }, { "text": "H. Solomon, Solicitor. Carol J. Banta, Attorney, entered an", "paragraph_id": "para_27" }, { "text": "appearance.", "paragraph_id": "para_28" }, { "text": "Nicole A. Travers argued the cause for intervenor-", "paragraph_id": "para_29" }, { "text": "respondent Northwest Rural Public Power District. With her", "paragraph_id": "para_30" }, { "text": "on the brief were Richard M. Lorenzo and J.D. Taliaferro.", "paragraph_id": "para_31" }, { "text": "Before: WILKINS, RAO and CHILDS, Circuit Judges.", "paragraph_id": "para_32" }, { "text": "Opinion for the Court filed by Circuit Judge CHILDS.", "paragraph_id": "para_33" }, { "text": "CHILDS, Circuit Judge: In the early 1930s, rural", "paragraph_id": "para_34" }, { "text": "communities across America lacked reliable access to", "paragraph_id": "para_35" }, { "text": "electricity. To remedy this deficiency, Congress enacted the", "paragraph_id": "para_36" }, { "text": "Rural Electrification Act of 1936, Pub. L. No. 74-605, 49 Stat.", "paragraph_id": "para_37" }, { "text": "1363 (codified at 7 U.S.C. § 901 et seq.). The Act", "paragraph_id": "para_38" }, { "text": "accomplishes its objective of “furnishing and improving of", "paragraph_id": "para_39" }, { "text": "electric service to persons in rural areas,” in part, by", "paragraph_id": "para_40" }, { "text": "authorizing lending by the federal government at special rates", "paragraph_id": "para_41" }, { "text": "to not-for-profit electricity-distribution cooperatives. 7", "paragraph_id": "para_42" }, { "text": "U.S.C. § 904(a); see also Sierra Club v. U.S. Dep’t of Agric.,", "paragraph_id": "para_43" }, { "text": "716 F.3d 653, 655 (D.C. Cir. 2013).", "paragraph_id": "para_44" }, { "text": "Petitioner Basin Electric Power Cooperative (Basin) is one", "paragraph_id": "para_45" }, { "text": "such not-for-profit cooperative. As a cooperative, Basin is", "paragraph_id": "para_46" }, { "text": "owned by its members, who are also its wholesale customers.", "paragraph_id": "para_47" }, { "text": "Tri-State Generation and Transmission Association (Tri-State)", "paragraph_id": "para_48" }, { "text": "is one of Basin’s member-customers. Tri-State purchases", "paragraph_id": "para_49" }, { "text": "wholesale energy from Basin that it resells and transmits to its", "paragraph_id": "para_50" }, { "text": "3", "paragraph_id": "para_51" }, { "text": "member-customers, including Northwest Rural Public Power", "paragraph_id": "para_52" }, { "text": "District (Northwest Rural).", "paragraph_id": "para_53" }, { "text": "This case concerns the proper interpretation of the", "paragraph_id": "para_54" }, { "text": "contractual agreement between Basin and Tri-State (the", "paragraph_id": "para_55" }, { "text": "Basin/Tri-State Agreement). Specifically, we must decide", "paragraph_id": "para_56" }, { "text": "whether Northwest Rural’s withdrawal as a member of Tri-", "paragraph_id": "para_57" }, { "text": "State constitutes a breach of the Basin/Tri-State Agreement.", "paragraph_id": "para_58" }, { "text": "The Federal Energy Regulatory Commission (the", "paragraph_id": "para_59" }, { "text": "Commission) held that Northwest Rural’s withdrawal from", "paragraph_id": "para_60" }, { "text": "Tri-State would not breach the Basin/Tri-State Agreement", "paragraph_id": "para_61" }, { "text": "because the contract expressly contemplates such a scenario", "paragraph_id": "para_62" }, { "text": "and provides the mechanism for Tri-State and Basin to manage", "paragraph_id": "para_63" }, { "text": "the implications of Northwest Rural’s exit from Tri-State.", "paragraph_id": "para_64" }, { "text": "Because we agree with the Commission’s interpretation of the", "paragraph_id": "para_65" }, { "text": "Basin/Tri-State Agreement, we deny Basin’s petitions for", "paragraph_id": "para_66" }, { "text": "review.", "paragraph_id": "para_67" }, { "text": "I.", "paragraph_id": "para_68" }, { "text": "A.", "paragraph_id": "para_69" }, { "text": "Basin is a not-for-profit, member-owned electric", "paragraph_id": "para_70" }, { "text": "cooperative that owns and operates electric generation and", "paragraph_id": "para_71" }, { "text": "transmission facilities. Basin sells this electric energy to its", "paragraph_id": "para_72" }, { "text": "139 rural electric member systems in Colorado, Iowa,", "paragraph_id": "para_73" }, { "text": "Minnesota, Montana, Nebraska, New Mexico, North Dakota,", "paragraph_id": "para_74" }, { "text": "South Dakota, and Wyoming. As a cooperative, Basin is", "paragraph_id": "para_75" }, { "text": "governed by its members, which are also its wholesale", "paragraph_id": "para_76" }, { "text": "customers. This “cooperative structure is designed to give the", "paragraph_id": "para_77" }, { "text": "members the opportunity to satisfy their collective needs more", "paragraph_id": "para_78" }, { "text": "effectively than if the members acted independently.” Basin", "paragraph_id": "para_79" }, { "text": "Standing Addendum Ex. A, Aff. of Rebecca A. Kern ¶ 3.", "paragraph_id": "para_80" }, { "text": "4", "paragraph_id": "para_81" }, { "text": "Tri-State is one of Basin’s members. Tri-State is also a", "paragraph_id": "para_82" }, { "text": "not-for-profit, member-owned cooperative that provides", "paragraph_id": "para_83" }, { "text": "wholesale power and transmission services to 40 utility", "paragraph_id": "para_84" }, { "text": "members in Colorado, Nebraska, New Mexico, and Wyoming.", "paragraph_id": "para_85" }, { "text": "Tri-State buys electric energy wholesale from Basin and then", "paragraph_id": "para_86" }, { "text": "transmits that energy to its members for distribution to retail", "paragraph_id": "para_87" }, { "text": "customers. Tri-State members span the two major portions of", "paragraph_id": "para_88" }, { "text": "the United States’ electric grid—the Western Interconnection", "paragraph_id": "para_89" }, { "text": "and the Eastern Interconnection.", "paragraph_id": "para_90" }, { "text": "Northwest Rural is one of Tri-State’s Eastern", "paragraph_id": "para_91" }, { "text": "Interconnection members. Northwest Rural distributes the", "paragraph_id": "para_92" }, { "text": "energy it receives from Tri-State to households and businesses", "paragraph_id": "para_93" }, { "text": "in northwestern Nebraska. Northwest Rural makes up", "paragraph_id": "para_94" }, { "text": "approximately 11% of Tri-State’s total energy demands from", "paragraph_id": "para_95" }, { "text": "the Eastern Interconnection. See Nw. Rural Pub. Power Dist.", "paragraph_id": "para_96" }, { "text": "(Complaint Order), 189 FERC ¶ 61,164, at P 24 (2024).", "paragraph_id": "para_97" }, { "text": "B.", "paragraph_id": "para_98" }, { "text": "The sale and transfer of energy among Basin, Tri-State,", "paragraph_id": "para_99" }, { "text": "and Northwest Rural is governed by two distinct long-term, all-", "paragraph_id": "para_100" }, { "text": "requirements wholesale electric-service contracts.", "paragraph_id": "para_101" }, { "text": "One such contract governs the sale and transfer of energy", "paragraph_id": "para_102" }, { "text": "between Northwest Rural and Tri-State (the Tri-", "paragraph_id": "para_103" }, { "text": "State/Northwest Agreement). The Tri-State/Northwest", "paragraph_id": "para_104" }, { "text": "Agreement obligates Northwest Rural to purchase nearly all its", "paragraph_id": "para_105" }, { "text": "electric service requirements from Tri-State through 2050,", "paragraph_id": "para_106" }, { "text": "subject to narrow exceptions not relevant here. Complaint", "paragraph_id": "para_107" }, { "text": "Order, 189 FERC ¶ 61,164, at P 2.", "paragraph_id": "para_108" }, { "text": "Tri-State’s Bylaws provide that a member like Northwest", "paragraph_id": "para_109" }, { "text": "Rural “seeking early termination” of its agreement with Tri-", "paragraph_id": "para_110" }, { "text": "State and withdrawal from Tri-State “may do so only upon", "paragraph_id": "para_111" }, { "text": "satisfaction of all of its contractual obligations to Tri-State.”", "paragraph_id": "para_112" }, { "text": "5", "paragraph_id": "para_113" }, { "text": "See id. (citing Tri-State Bylaws). The Bylaws further", "paragraph_id": "para_114" }, { "text": "provide that “[t]he Board of Directors shall have authority to", "paragraph_id": "para_115" }, { "text": "prescribe equitable terms and conditions to be applied when a", "paragraph_id": "para_116" }, { "text": "member withdraws from membership.” Id. (quoting Tri-State", "paragraph_id": "para_117" }, { "text": "Bylaws). Yet per Tri-State’s Rate Schedule No. 281, “Tri-", "paragraph_id": "para_118" }, { "text": "State’s Board of Directors has no discretion to prevent a", "paragraph_id": "para_119" }, { "text": "member from withdrawing from membership in Tri-State, so", "paragraph_id": "para_120" }, { "text": "long as the member complies with” those terms and", "paragraph_id": "para_121" }, { "text": "conditions. 1 Id. at P 14. A member seeking to withdraw", "paragraph_id": "para_122" }, { "text": "must “provide non-conditional notice to Tri-State of its intent", "paragraph_id": "para_123" }, { "text": "to satisfy its [contractual obligations] and withdraw from Tri-", "paragraph_id": "para_124" }, { "text": "State.” Id.", "paragraph_id": "para_125" }, { "text": "A separate contract, the Basin/Tri-State Agreement, to", "paragraph_id": "para_126" }, { "text": "which Northwest Rural is not a party, governs the sale and", "paragraph_id": "para_127" }, { "text": "transfer of energy between Basin and Tri-State. This", "paragraph_id": "para_128" }, { "text": "agreement requires, with limited exceptions not relevant here,", "paragraph_id": "para_129" }, { "text": "that Tri-State “purchase and receive from [Basin] all electric", "paragraph_id": "para_130" }, { "text": "power and energy which Tri-State shall require to supply its", "paragraph_id": "para_131" }, { "text": "Member-Systems’ loads in the Eastern Interconnection”", "paragraph_id": "para_132" }, { "text": "through 2050. J.A. 183, 192. A choice-of-law provision in", "paragraph_id": "para_133" }, { "text": "the Basin/Tri-State Agreement provides that the “rights and", "paragraph_id": "para_134" }, { "text": "obligations of the Parties . . . shall be governed by and", "paragraph_id": "para_135" }, { "text": "construed according to” Nebraska law. J.A. 193. The", "paragraph_id": "para_136" }, { "text": "Basin/Tri-State Agreement is the focus of this proceeding.", "paragraph_id": "para_137" }, { "text": "C.", "paragraph_id": "para_138" }, { "text": "In April 2022, Northwest Rural submitted to Tri-State a", "paragraph_id": "para_139" }, { "text": "non-conditional two-year notice of intent to withdraw from Tri-", "paragraph_id": "para_140" }, { "text": "1 In separate proceedings before the Commission, Docket Nos.", "paragraph_id": "para_141" }, { "text": "EL21-75-000, ER21-2818-000, and EL22-4-000, the parties litigated", "paragraph_id": "para_142" }, { "text": "the terms, procedures, and methodology for calculating contract", "paragraph_id": "para_143" }, { "text": "termination payments for Tri-State’s members seeking to terminate", "paragraph_id": "para_144" }, { "text": "their contracts with and memberships in Tri-State. J.A. 1351–52.", "paragraph_id": "para_145" }, { "text": "6", "paragraph_id": "para_146" }, { "text": "State membership and terminate the Tri-State/Northwest", "paragraph_id": "para_147" }, { "text": "Agreement, effective May 1, 2024 [J.A. 933].", "paragraph_id": "para_148" }, { "text": "Basin responded by initiating litigation against Tri-State in", "paragraph_id": "para_149" }, { "text": "the United States District Court for the District of North Dakota", "paragraph_id": "para_150" }, { "text": "for breach of the Basin/Tri-State Agreement. Basin sought", "paragraph_id": "para_151" }, { "text": "declaratory and injunctive relief pertaining to the exit fee that", "paragraph_id": "para_152" }, { "text": "Northwest Rural would pay to Tri-State for withdrawing its", "paragraph_id": "para_153" }, { "text": "membership as well as to “prohibit[] and restrain[] Tri-State", "paragraph_id": "para_154" }, { "text": "from allowing or threatening to allow any Eastern", "paragraph_id": "para_155" }, { "text": "Interconnection member from terminating their [agreements]", "paragraph_id": "para_156" }, { "text": "with Tri-State.” Basin Elec. Power Coop. v. Tri-State", "paragraph_id": "para_157" }, { "text": "Generation & Transmission Ass’n, No. 3:21-CV-220, 2022", "paragraph_id": "para_158" }, { "text": "WL 18622225, at *5 (D.N.D. Oct. 31, 2022).", "paragraph_id": "para_159" }, { "text": "The district court dismissed Basin’s complaint without", "paragraph_id": "para_160" }, { "text": "prejudice, deferring primary jurisdiction to the Commission.", "paragraph_id": "para_161" }, { "text": "Id. at *11. In that proceeding, the Commission issued an order", "paragraph_id": "para_162" }, { "text": "directing Tri-State to adopt the Commission’s approved exit-", "paragraph_id": "para_163" }, { "text": "fee methodology but declined to address whether Tri-State had", "paragraph_id": "para_164" }, { "text": "breached the Basin/Tri-State Agreement by permitting its", "paragraph_id": "para_165" }, { "text": "Eastern Interconnection members, like Northwest Rural, to", "paragraph_id": "para_166" }, { "text": "withdraw. Tri-State Generation & Transmission Ass’n, 185", "paragraph_id": "para_167" }, { "text": "FERC ¶ 61,201, at P 554 n.900 (2023).2 As the Commission", "paragraph_id": "para_168" }, { "text": "explained on rehearing in that proceeding, the exit-fee", "paragraph_id": "para_169" }, { "text": "methodology and Tri-State’s obligations under the Basin/Tri-", "paragraph_id": "para_170" }, { "text": "State Agreement are distinct issues. Tri-State Generation &", "paragraph_id": "para_171" }, { "text": "Transmission Ass’n, 187 FERC ¶ 61,101, at P 67 (2024).", "paragraph_id": "para_172" }, { "text": "Thus, any potential breach of the Basin/Tri-State Agreement", "paragraph_id": "para_173" }, { "text": "2 The Tenth Circuit ultimately denied Tri-State’s petitions", "paragraph_id": "para_174" }, { "text": "challenging the exit-fee, which unsuccessfully asserted that the", "paragraph_id": "para_175" }, { "text": "Commission’s decisions adopting the exit-fee methodology were", "paragraph_id": "para_176" }, { "text": "arbitrary and capricious. Tri-State Generation & Transmission", "paragraph_id": "para_177" }, { "text": "Ass’n v. FERC, 170 F.4th 1254, 1261 (10th Cir. 2026).", "paragraph_id": "para_178" }, { "text": "7", "paragraph_id": "para_179" }, { "text": "would not bear on a generally applicable exit-fee methodology.", "paragraph_id": "para_180" }, { "text": "See id.", "paragraph_id": "para_181" }, { "text": "Basin subsequently filed another complaint in the District", "paragraph_id": "para_182" }, { "text": "of North Dakota seeking a determination that Northwest", "paragraph_id": "para_183" }, { "text": "Rural’s withdrawal from Tri-State would constitute a breach by", "paragraph_id": "para_184" }, { "text": "Tri-State of the Basin/Tri-State Agreement. Basin Elec.", "paragraph_id": "para_185" }, { "text": "Power Coop. v. Tri-State Generation & Transmission Ass’n,", "paragraph_id": "para_186" }, { "text": "No. 3:24-CV-8, 2024 WL 3202167, at *3 (D.N.D. Apr. 24,", "paragraph_id": "para_187" }, { "text": "2024). After the district court denied Basin’s motion for a", "paragraph_id": "para_188" }, { "text": "preliminary injunction to enjoin Tri-State from permitting", "paragraph_id": "para_189" }, { "text": "Northwest Rural to withdraw from Tri-State, see id. at *1,", "paragraph_id": "para_190" }, { "text": "Basin submitted a notice of voluntary dismissal of its complaint", "paragraph_id": "para_191" }, { "text": "without prejudice, see Basin Electric Power Cooperative,", "paragraph_id": "para_192" }, { "text": "Notice of Voluntary Dismissal Without Prejudice, Basin Elec.", "paragraph_id": "para_193" }, { "text": "Power Coop. v. Tri-State Generation & Transmission Ass’n,", "paragraph_id": "para_194" }, { "text": "No. 3:24-CV-8 (D.N.D. May 2, 2024), ECF No. 75.", "paragraph_id": "para_195" }, { "text": "D.", "paragraph_id": "para_196" }, { "text": "In March 2024, Northwest Rural filed a complaint with the", "paragraph_id": "para_197" }, { "text": "Commission against Basin and Tri-State pursuant to sections", "paragraph_id": "para_198" }, { "text": "206, 306, and 309 of the Federal Power Act, 16 U.S.C. §§ 824e,", "paragraph_id": "para_199" }, { "text": "825e, 825h, and also pursuant to Rule 206 of the Federal", "paragraph_id": "para_200" }, { "text": "Energy Regulatory Commission’s Rules of Practice and", "paragraph_id": "para_201" }, { "text": "Procedure, 18 C.F.R. § 385.206. Northwest Rural’s", "paragraph_id": "para_202" }, { "text": "complaint requested that: (1) the Commission assert primary", "paragraph_id": "para_203" }, { "text": "jurisdiction over the interpretation of the Basin/Tri-State", "paragraph_id": "para_204" }, { "text": "Agreement, (2) the Commission “hold that [Northwest", "paragraph_id": "para_205" }, { "text": "Rural]’s withdrawal from Tri-State is permissible” under the", "paragraph_id": "para_206" }, { "text": "Basin/Tri-State Agreement, and (3) to the extent the Basin/Tri-", "paragraph_id": "para_207" }, { "text": "State Agreement precluded Northwest Rural’s withdrawal,", "paragraph_id": "para_208" }, { "text": "hold that it is not just and reasonable. J.A. 67; see 16 U.S.C.", "paragraph_id": "para_209" }, { "text": "§ 824d(a) (directing the Commission to assure that “[a]ll rates", "paragraph_id": "para_210" }, { "text": "and charges” and “rules and regulations affecting or pertaining", "paragraph_id": "para_211" }, { "text": "8", "paragraph_id": "para_212" }, { "text": "to such rates or charges” by regulated entities for the", "paragraph_id": "para_213" }, { "text": "transmission or sale of electric energy are “just and", "paragraph_id": "para_214" }, { "text": "reasonable”).", "paragraph_id": "para_215" }, { "text": "The Commission first found it appropriate to exercise", "paragraph_id": "para_216" }, { "text": "primary jurisdiction given its special expertise in interpreting", "paragraph_id": "para_217" }, { "text": "similar agreements under the Federal Power Act and the need", "paragraph_id": "para_218" }, { "text": "for uniform interpretation of the Basin/Tri-State Agreement for", "paragraph_id": "para_219" }, { "text": "other Eastern Interconnection members. Complaint Order,", "paragraph_id": "para_220" }, { "text": "189 FERC ¶ 61,164, at PP 65–69.", "paragraph_id": "para_221" }, { "text": "Turning to the merits, the Commission found that", "paragraph_id": "para_222" }, { "text": "Northwest Rural’s withdrawal from Tri-State would not", "paragraph_id": "para_223" }, { "text": "constitute a breach of the Basin/Tri-State Agreement. Id. at", "paragraph_id": "para_224" }, { "text": "P 73. In so concluding, the Commission rejected Basin’s", "paragraph_id": "para_225" }, { "text": "asserted premise that Northwest Rural’s withdrawal from Tri-", "paragraph_id": "para_226" }, { "text": "State was, in effect, the same as Tri-State’s withdrawal from", "paragraph_id": "para_227" }, { "text": "Basin. Id. Although section 14 of the Basin/Tri-State", "paragraph_id": "para_228" }, { "text": "Agreement did not provide any means for Tri-State’s", "paragraph_id": "para_229" }, { "text": "termination prior to 2050, the Commission found that Tri-State", "paragraph_id": "para_230" }, { "text": "was not attempting to terminate the Basin/Tri-State Agreement", "paragraph_id": "para_231" }, { "text": "and so section 14 was inapplicable. Id. at P 74. Instead, the", "paragraph_id": "para_232" }, { "text": "Commission ruled, section 9 governed Tri-State’s obligations", "paragraph_id": "para_233" }, { "text": "with respect to Northwest Rural’s withdrawal from Tri-State.", "paragraph_id": "para_234" }, { "text": "Id. at P 74, 76.", "paragraph_id": "para_235" }, { "text": "Considering the plain language of section 9, the", "paragraph_id": "para_236" }, { "text": "Commission found Tri-State’s Agreement with Northwest", "paragraph_id": "para_237" }, { "text": "Rural to be an “asset” for purposes of section 9.3 Id. at P 76.", "paragraph_id": "para_238" }, { "text": "The Commission further determined that the second and third", "paragraph_id": "para_239" }, { "text": "sentences of section 9 explicitly supply the mechanism by", "paragraph_id": "para_240" }, { "text": "3 The Commission assumed without deciding that Northwest Rural,", "paragraph_id": "para_241" }, { "text": "which accounts for 11% of Tri-State’s assets, constitutes a", "paragraph_id": "para_242" }, { "text": "“substantial portion” of Tri-State’s Eastern Interconnection assets.", "paragraph_id": "para_243" }, { "text": "Complaint Order, 189 FERC ¶ 61,164, at P 76. We do the same.", "paragraph_id": "para_244" }, { "text": "9", "paragraph_id": "para_245" }, { "text": "which Tri-State can transfer such assets, in the absence of", "paragraph_id": "para_246" }, { "text": "Basin’s approval, without breaching the Basin/Tri-State", "paragraph_id": "para_247" }, { "text": "Agreement. Id. at P 77. Accordingly, so long as Tri-State", "paragraph_id": "para_248" }, { "text": "complied with the requirements of section 9, the Commission", "paragraph_id": "para_249" }, { "text": "determined that “Tri-State would not be in breach of the", "paragraph_id": "para_250" }, { "text": "[Basin/Tri-State Agreement] following Northwest Rural’s", "paragraph_id": "para_251" }, { "text": "withdrawal.” Id. at P 78.", "paragraph_id": "para_252" }, { "text": "The Commission also rejected Basin’s reliance on federal", "paragraph_id": "para_253" }, { "text": "courts’ interpretation of similar all-requirements power", "paragraph_id": "para_254" }, { "text": "contracts determining that such contracts preclude early", "paragraph_id": "para_255" }, { "text": "termination. Id. at PP 80–81. Each of Basin’s cited", "paragraph_id": "para_256" }, { "text": "authorities, the Commission explained, was distinguishable", "paragraph_id": "para_257" }, { "text": "because they involved disputes between the parties to a", "paragraph_id": "para_258" }, { "text": "contract where one of the contracting parties sought to", "paragraph_id": "para_259" }, { "text": "terminate the long-term power contract. Id. at P 80. But", "paragraph_id": "para_260" }, { "text": "Northwest Rural is not a party to the Basin/Tri-State", "paragraph_id": "para_261" }, { "text": "Agreement and does not have an all-requirements contract with", "paragraph_id": "para_262" }, { "text": "Basin. Id. Thus, Basin’s authorities would only pertain to", "paragraph_id": "para_263" }, { "text": "this proceeding if, in fact, Tri-State were attempting to", "paragraph_id": "para_264" }, { "text": "terminate the Basin/Tri-State Agreement. What’s more, the", "paragraph_id": "para_265" }, { "text": "Commission noted, Tri-State is “not affirmatively trying to", "paragraph_id": "para_266" }, { "text": "breach or otherwise get out of the contract, but is [instead]", "paragraph_id": "para_267" }, { "text": "responding to Commission instructions to establish just and", "paragraph_id": "para_268" }, { "text": "reasonable [contract termination payments] for its members,”", "paragraph_id": "para_269" }, { "text": "further distinguishing this proceeding from those in which a", "paragraph_id": "para_270" }, { "text": "party in Tri-State’s position “deliberately took steps to", "paragraph_id": "para_271" }, { "text": "eliminate its obligations under the contract.” Id. at P 81", "paragraph_id": "para_272" }, { "text": "(distinguishing Tri-State Generation & Transmission Ass’n v.", "paragraph_id": "para_273" }, { "text": "Shoshone River Power, Inc., 874 F.2d 1346 (10th Cir. 1989)).", "paragraph_id": "para_274" }, { "text": "Such cases prohibiting early termination by a contracting party", "paragraph_id": "para_275" }, { "text": "accordingly had no bearing on whether Tri-State’s transfer of", "paragraph_id": "para_276" }, { "text": "assets breaches the Basin/Tri-State Agreement. See id. at", "paragraph_id": "para_277" }, { "text": "PP 80–81.", "paragraph_id": "para_278" }, { "text": "10", "paragraph_id": "para_279" }, { "text": "Finally, given its determination that “Northwest Rural’s", "paragraph_id": "para_280" }, { "text": "withdrawal from Tri-State does not cause a breach to the", "paragraph_id": "para_281" }, { "text": "[Basin/Tri-State Agreement],” the Commission “den[ied] the", "paragraph_id": "para_282" }, { "text": "complaint as the Commission [did] not find[] any provision to", "paragraph_id": "para_283" }, { "text": "be unjust or unreasonable.” Id. at P 82; see also id. at P 73.", "paragraph_id": "para_284" }, { "text": "Shortly after the Commission’s Order finding that", "paragraph_id": "para_285" }, { "text": "Northwest Rural’s withdrawal from Tri-State does not violate", "paragraph_id": "para_286" }, { "text": "the Basin/Tri-State Agreement, Northwest Rural notified Tri-", "paragraph_id": "para_287" }, { "text": "State of its intent to withdraw from Tri-State, effective January", "paragraph_id": "para_288" }, { "text": "1, 2027. See Basin Standing Addendum Exhibit C.", "paragraph_id": "para_289" }, { "text": "Basin petitioned for rehearing. Though the Commission", "paragraph_id": "para_290" }, { "text": "expanded the discussion in the Complaint Order in response to", "paragraph_id": "para_291" }, { "text": "Basin’s arguments in its rehearing petition, it arrived at the", "paragraph_id": "para_292" }, { "text": "same result. Nw. Rural Pub. Power Dist. (Rehearing Order),", "paragraph_id": "para_293" }, { "text": "191 FERC ¶ 61,087, at P 2 & n.4 (2025) (citing 16 U.S.C.", "paragraph_id": "para_294" }, { "text": "§ 825l(a)).", "paragraph_id": "para_295" }, { "text": "First, the Commission rejected Basin’s argument that it", "paragraph_id": "para_296" }, { "text": "had incorrectly “focus[ed] only on the portion of section 9", "paragraph_id": "para_297" }, { "text": "requiring Tri-State to ‘pay such pro rata portion of the", "paragraph_id": "para_298" }, { "text": "outstanding indebtedness’ and ignore[ed] the portions relating", "paragraph_id": "para_299" }, { "text": "to ‘other obligations and commitments of Basin at the time", "paragraph_id": "para_300" }, { "text": "existing, as shall be determined by Basin and shall otherwise", "paragraph_id": "para_301" }, { "text": "comply with such reasonable terms and conditions as Basin", "paragraph_id": "para_302" }, { "text": "shall require.’” Id. at P 26 (quoting Basin/Tri-State", "paragraph_id": "para_303" }, { "text": "Agreement § 9) (citation modified). The Commission", "paragraph_id": "para_304" }, { "text": "clarified that in ruling on Northwest Rural’s complaint, it had", "paragraph_id": "para_305" }, { "text": "“needed only to determine whether a reduction in Tri-State’s", "paragraph_id": "para_306" }, { "text": "requirements following Northwest Rural’s withdrawal would", "paragraph_id": "para_307" }, { "text": "cause Tri-State to breach the [Basin/Tri-State Agreement].”", "paragraph_id": "para_308" }, { "text": "Id. at P 27. By concluding that it would not “because section", "paragraph_id": "para_309" }, { "text": "9 of the contract permits Tri-State to dispose of some of its", "paragraph_id": "para_310" }, { "text": "assets” prior to 2050, the Commission noted that it", "paragraph_id": "para_311" }, { "text": "11", "paragraph_id": "para_312" }, { "text": "intentionally “did not determine the amount that Tri-State", "paragraph_id": "para_313" }, { "text": "would have to pay Basin to comply with section 9’s conditions”", "paragraph_id": "para_314" }, { "text": "in the event of Northwest Rural’s withdrawal. Id. “As for the", "paragraph_id": "para_315" }, { "text": "provision that Basin may require ‘reasonable terms and", "paragraph_id": "para_316" }, { "text": "conditions’ with respect to a transfer of Tri-State’s” assets, the", "paragraph_id": "para_317" }, { "text": "Commission explained only that, “reasonable terms and", "paragraph_id": "para_318" }, { "text": "conditions” could not be construed in such a way as to “render", "paragraph_id": "para_319" }, { "text": "the second sentence of section 9 inoperable and effectively", "paragraph_id": "para_320" }, { "text": "prevent Tri-State from disposing of its assets as otherwise", "paragraph_id": "para_321" }, { "text": "permitted by section 9.” Id.", "paragraph_id": "para_322" }, { "text": "The Commission also rejected Basin’s assertion that", "paragraph_id": "para_323" }, { "text": "allowing Northwest Rural to terminate the Tri-State/Northwest", "paragraph_id": "para_324" }, { "text": "Agreement is functionally the same as allowing Tri-State to", "paragraph_id": "para_325" }, { "text": "terminate the Basin/Tri-State Agreement thus rendering", "paragraph_id": "para_326" }, { "text": "section 14 superfluous. Id. at P 28. To the extent that Basin’s", "paragraph_id": "para_327" }, { "text": "argument rested on a scenario in which all six of Tri-State’s", "paragraph_id": "para_328" }, { "text": "Eastern Interconnection members withdraw from Tri-State, the", "paragraph_id": "para_329" }, { "text": "Commission deemed that “hypothetical as outside the scope”", "paragraph_id": "para_330" }, { "text": "of the proceeding. Id.", "paragraph_id": "para_331" }, { "text": "Finally, the Commission rejected Basin’s assertion that the", "paragraph_id": "para_332" }, { "text": "alleged purpose of the Basin/Tri-State Agreement should", "paragraph_id": "para_333" }, { "text": "inform its interpretation of the unambiguous contract, id. at", "paragraph_id": "para_334" }, { "text": "P 30 (noting that under Nebraska law, unambiguous", "paragraph_id": "para_335" }, { "text": "contractual terms are accorded their plain and ordinary", "paragraph_id": "para_336" }, { "text": "meaning (citations omitted)), and again found Basin’s cited", "paragraph_id": "para_337" }, { "text": "federal caselaw distinguishable for the “reasons given in the", "paragraph_id": "para_338" }, { "text": "Complaint Order,” id. at P 31.", "paragraph_id": "para_339" }, { "text": "12", "paragraph_id": "para_340" }, { "text": "Basin filed timely petitions for review of the", "paragraph_id": "para_341" }, { "text": "Commission’s orders. For the reasons that follow, we deny", "paragraph_id": "para_342" }, { "text": "the petitions.4", "paragraph_id": "para_343" }, { "text": "II.", "paragraph_id": "para_344" }, { "text": "We begin with the Commission’s assertion that we lack", "paragraph_id": "para_345" }, { "text": "jurisdiction over Basin’s petition. Under section 313(b) of the", "paragraph_id": "para_346" }, { "text": "Federal Power Act, we have jurisdiction to review petitions", "paragraph_id": "para_347" }, { "text": "only from parties “aggrieved” by an order of the Commission.", "paragraph_id": "para_348" }, { "text": "16 U.S.C. § 825l(b). “A party is ‘aggrieved’ if it makes ‘the", "paragraph_id": "para_349" }, { "text": "same showing of injury that suffices to establish standing’", "paragraph_id": "para_350" }, { "text": "under Article III of the Constitution of the United States.”", "paragraph_id": "para_351" }, { "text": "Mich. Elec. Transmission Co. v. FERC, 141 F.4th 1296, 1302", "paragraph_id": "para_352" }, { "text": "(D.C. Cir. 2025) (quoting San Diego Gas & Elec. Co. v. FERC,", "paragraph_id": "para_353" }, { "text": "913 F.3d 127, 136 (D.C. Cir. 2019)). To do so, Basin must", "paragraph_id": "para_354" }, { "text": "show it suffered an injury in fact that is fairly traceable to the", "paragraph_id": "para_355" }, { "text": "challenged action and would be redressable by a favorable", "paragraph_id": "para_356" }, { "text": "court decision. Id.; see also Lujan v. Defs. of Wildlife, 504", "paragraph_id": "para_357" }, { "text": "U.S. 555, 560–61 (1992).", "paragraph_id": "para_358" }, { "text": "The Commission asserts that Basin lacks standing because", "paragraph_id": "para_359" }, { "text": "the Commission denied Northwest Rural’s complaint against", "paragraph_id": "para_360" }, { "text": "Basin, making “Basin the prevailing party below.”", "paragraph_id": "para_361" }, { "text": "Respondent’s Br. 31. It follows, according to the", "paragraph_id": "para_362" }, { "text": "Commission, that Basin was not aggrieved by the", "paragraph_id": "para_363" }, { "text": "Commission’s ruling.", "paragraph_id": "para_364" }, { "text": "4 In ruling on Basin’s petitions, we confine our review to the issues", "paragraph_id": "para_365" }, { "text": "“brought before the court by [Basin as] petitioner,” and decline to", "paragraph_id": "para_366" }, { "text": "address ancillary issues raised by Intervenor-Petitioner Tri-State.", "paragraph_id": "para_367" }, { "text": "See Am. Whitewater v. FERC, 125 F.4th 1139, 1153 n.8 (D.C. Cir.", "paragraph_id": "para_368" }, { "text": "2025) (noting that intervenors are not “permit[ted]” to “raise an issue", "paragraph_id": "para_369" }, { "text": "not brought before the court by the petitioner” absent “extraordinary", "paragraph_id": "para_370" }, { "text": "circumstance[s]”).", "paragraph_id": "para_371" }, { "text": "13", "paragraph_id": "para_372" }, { "text": "The Commission is incorrect. To be sure, the", "paragraph_id": "para_373" }, { "text": "Commission’s ultimate disposition was to deny Northwest", "paragraph_id": "para_374" }, { "text": "Rural’s complaint against Basin. See Complaint Order, 189", "paragraph_id": "para_375" }, { "text": "FERC ¶ 61,164, at P 82. But the Commission’s narrow focus", "paragraph_id": "para_376" }, { "text": "on whether Northwest Rural’s complaint was ultimately", "paragraph_id": "para_377" }, { "text": "granted or denied ignores the pertinent inquiry—“the substance", "paragraph_id": "para_378" }, { "text": "of the [Commission’s] decision itself.” Cf. New England", "paragraph_id": "para_379" }, { "text": "Power Generators Ass’n v. FERC, 707 F.3d 364, 369 (D.C.", "paragraph_id": "para_380" }, { "text": "Cir. 2013) (noting that “a FERC decision’s legal reasoning . . .", "paragraph_id": "para_381" }, { "text": "confers standing” only where “the substance of that decision", "paragraph_id": "para_382" }, { "text": "itself gives rise to an injury in fact”).", "paragraph_id": "para_383" }, { "text": "We rejected a similar form-over-substance argument in", "paragraph_id": "para_384" }, { "text": "Michigan Electric, 141 F.4th at 1302–03. The parties in", "paragraph_id": "para_385" }, { "text": "Michigan Electric disagreed over ownership of network", "paragraph_id": "para_386" }, { "text": "upgrades connecting a new solar generation park to the parties’", "paragraph_id": "para_387" }, { "text": "jointly owned transmission line. Id. at 1298. Requiring a", "paragraph_id": "para_388" }, { "text": "resolution of this ownership dispute for planning purposes, the", "paragraph_id": "para_389" }, { "text": "operator of the broader electricity transmission system", "paragraph_id": "para_390" }, { "text": "submitted a proposal to the Commission for review. Id. at", "paragraph_id": "para_391" }, { "text": "1301. The proposal assigned ownership of the network", "paragraph_id": "para_392" }, { "text": "upgrades equally between Michigan Electric, Michigan Public", "paragraph_id": "para_393" }, { "text": "Power Agency, and Wolverine Power based on the operator’s", "paragraph_id": "para_394" }, { "text": "interpretation of the contractual agreements amongst the three", "paragraph_id": "para_395" }, { "text": "entities. Id. Michigan Public Power Agency and Wolverine", "paragraph_id": "para_396" }, { "text": "Power supported the proposal. Id. Michigan Electric,", "paragraph_id": "para_397" }, { "text": "however, opposed the proposal, maintaining that the governing", "paragraph_id": "para_398" }, { "text": "contracts granted it exclusive ownership of the network", "paragraph_id": "para_399" }, { "text": "upgrades. Id. The Commission “held no provision instanced", "paragraph_id": "para_400" }, { "text": "by the parties determined ownership of the network upgrades”", "paragraph_id": "para_401" }, { "text": "and accordingly rejected the operator’s proposal without", "paragraph_id": "para_402" }, { "text": "prejudice, thereby permitting the operator to file another", "paragraph_id": "para_403" }, { "text": "proposal. Id.", "paragraph_id": "para_404" }, { "text": "14", "paragraph_id": "para_405" }, { "text": "Michigan Electric petitioned this court for review of the", "paragraph_id": "para_406" }, { "text": "Commission’s decision. The Commission challenged", "paragraph_id": "para_407" }, { "text": "Michigan Electric’s standing on the basis that the Commission", "paragraph_id": "para_408" }, { "text": "had rejected the proposal that Michigan Electric had objected", "paragraph_id": "para_409" }, { "text": "to, “in effect ruling in [Michigan Electric’s] favor.” Id. at", "paragraph_id": "para_410" }, { "text": "1302. We disagreed, explaining that Michigan Electric was", "paragraph_id": "para_411" }, { "text": "aggrieved by the Commission’s order because, “on the way to", "paragraph_id": "para_412" }, { "text": "declining to determine ownership rights,” the Commission had", "paragraph_id": "para_413" }, { "text": "“rejected [Michigan Electric’s] claim that it had exclusive", "paragraph_id": "para_414" }, { "text": "ownership of the network upgrades.” Id. That", "paragraph_id": "para_415" }, { "text": "determination, we explained, resulted in Michigan Electric’s", "paragraph_id": "para_416" }, { "text": "“continuing inability to ascertain its ownership share, . . .", "paragraph_id": "para_417" }, { "text": "estimate the eventual amount of financial return from the", "paragraph_id": "para_418" }, { "text": "project,” or “plan for capital expenditures and financing.” Id.", "paragraph_id": "para_419" }, { "text": "at 1303 (citation omitted). Such harms, we concluded, caused", "paragraph_id": "para_420" }, { "text": "a “present injurious effect” on Michigan Electric’s “business", "paragraph_id": "para_421" }, { "text": "decisions” that would be “redressed if [we] were to hold", "paragraph_id": "para_422" }, { "text": "[Michigan Electric] alone owns the network upgrades.” Id.", "paragraph_id": "para_423" }, { "text": "As such, we ruled that Michigan Electric had standing to seek", "paragraph_id": "para_424" }, { "text": "review of the Commission’s decision.", "paragraph_id": "para_425" }, { "text": "The same logic applies here. The Commission, on its way", "paragraph_id": "para_426" }, { "text": "to denying Northwest Rural’s complaint, rejected Basin’s", "paragraph_id": "para_427" }, { "text": "argument that Northwest Rural’s withdrawal from Tri-State", "paragraph_id": "para_428" }, { "text": "breaches the terms of the Basin/Tri-State Agreement. See", "paragraph_id": "para_429" }, { "text": "Complaint Order, 189 FERC ¶ 61,164, at P 73. Importantly,", "paragraph_id": "para_430" }, { "text": "Northwest Rural’s complaint specifically asked the", "paragraph_id": "para_431" }, { "text": "Commission to “hold that Northwest Rural’s withdrawal from", "paragraph_id": "para_432" }, { "text": "Tri-State does not violate the [Basin/Tri-State Agreement].”", "paragraph_id": "para_433" }, { "text": "Id. at PP 1, 72. And the Commission granted that request over", "paragraph_id": "para_434" }, { "text": "Basin’s objections. Id. at PP 51, 72–73.", "paragraph_id": "para_435" }, { "text": "As a result, Basin faces Northwest Rural’s impending", "paragraph_id": "para_436" }, { "text": "withdrawal from Tri-State and will have to bear the burden of", "paragraph_id": "para_437" }, { "text": "costs it would not otherwise incur if the Commission had ruled", "paragraph_id": "para_438" }, { "text": "15", "paragraph_id": "para_439" }, { "text": "that Northwest Rural’s withdrawal is contractually prohibited.", "paragraph_id": "para_440" }, { "text": "For example, loss of Northwest Rural’s energy demands will", "paragraph_id": "para_441" }, { "text": "reduce the requirements Tri-State purchases from Basin. This", "paragraph_id": "para_442" }, { "text": "reduction, in turn, will result in negative financial implications", "paragraph_id": "para_443" }, { "text": "for Basin which constructs or acquires assets specifically to", "paragraph_id": "para_444" }, { "text": "meet the demands of each of its members. See Kern Aff. ¶¶ 8–", "paragraph_id": "para_445" }, { "text": "9. To be sure, as the Commission points out, Northwest Rural", "paragraph_id": "para_446" }, { "text": "provided Tri-Sate two years’ notice of its intent to withdraw", "paragraph_id": "para_447" }, { "text": "and the particulars of Northwest Rural’s exit are still being", "paragraph_id": "para_448" }, { "text": "worked out in separate Commission proceedings. See", "paragraph_id": "para_449" }, { "text": "Respondent’s Br. 39–41; see also Complaint Order, 189 FERC", "paragraph_id": "para_450" }, { "text": "¶ 61,164, at PP 2–10; Tri-State Generation and Transmission", "paragraph_id": "para_451" }, { "text": "Ass’n, 192 FERC ¶ 61,109, at PP 53–64 (2025) (ruling on", "paragraph_id": "para_452" }, { "text": "compliance filings involving contract termination payments", "paragraph_id": "para_453" }, { "text": "that Tri-State members must pay when they withdraw). But", "paragraph_id": "para_454" }, { "text": "still, Basin must “make current planning decisions that take", "paragraph_id": "para_455" }, { "text": "into account that it will no longer provide electric power and", "paragraph_id": "para_456" }, { "text": "energy to Tri-State to serve Northwest Rural.” Petitioner’s Br.", "paragraph_id": "para_457" }, { "text": "23 (citing Kern Aff. ¶¶ 9, 12–13). Specifically, Northwest", "paragraph_id": "para_458" }, { "text": "Rural’s impending withdrawal in 2027 impacts Basin’s current", "paragraph_id": "para_459" }, { "text": "development of its long-term “load forecast,” which informs its", "paragraph_id": "para_460" }, { "text": "“power supply planning activities, transmission planning", "paragraph_id": "para_461" }, { "text": "activities, financial forecast development, and the rate setting", "paragraph_id": "para_462" }, { "text": "process.” Kern Aff. ¶ 12.", "paragraph_id": "para_463" }, { "text": "This harm is not, as the Commission asserts, attenuated or", "paragraph_id": "para_464" }, { "text": "hypothetical. Rather, it has “a present injurious effect on", "paragraph_id": "para_465" }, { "text": "[Basin’s] business decisions.” Mich. Elec. Transmission Co.,", "paragraph_id": "para_466" }, { "text": "141 F.4th at 1303 (quoting Great Lakes Gas Transmission Ltd.", "paragraph_id": "para_467" }, { "text": "v. FERC, 984 F.2d 426, 430 (D.C. Cir. 1993)). Because its", "paragraph_id": "para_468" }, { "text": "injury would be redressed if this court were to hold Northwest", "paragraph_id": "para_469" }, { "text": "Rural’s withdrawal from Tri-State breaches the Basin/Tri-State", "paragraph_id": "para_470" }, { "text": "16", "paragraph_id": "para_471" }, { "text": "Agreement, Basin has standing to pursue its claim here.5 See", "paragraph_id": "para_472" }, { "text": "id.", "paragraph_id": "para_473" }, { "text": "III.", "paragraph_id": "para_474" }, { "text": "We review Commission orders under the Administrative", "paragraph_id": "para_475" }, { "text": "Procedure Act, which requires us to determine that agency", "paragraph_id": "para_476" }, { "text": "decisions are not “arbitrary, capricious, an abuse of discretion,", "paragraph_id": "para_477" }, { "text": "or otherwise not in accordance with law.” 5 U.S.C.", "paragraph_id": "para_478" }, { "text": "§ 706(2)(A); see also Coal. of MISO Transmission Customers", "paragraph_id": "para_479" }, { "text": "v. FERC, 45 F.4th 1004, 1016 (D.C. Cir. 2022).", "paragraph_id": "para_480" }, { "text": "In reviewing the Commission’s interpretation of a", "paragraph_id": "para_481" }, { "text": "contract, we begin by considering “de novo whether the", "paragraph_id": "para_482" }, { "text": "relevant language unambiguously addresses the matter at", "paragraph_id": "para_483" }, { "text": "issue.” E. Tex. Elec. Coop., Inc. v. FERC, 90 F.4th 579, 587", "paragraph_id": "para_484" }, { "text": "(D.C. Cir. 2024) (quoting Okla. Gas & Elec. Co. v. FERC, 11", "paragraph_id": "para_485" }, { "text": "F.4th 821, 827 (D.C. Cir. 2021)). Where, as here, the parties", "paragraph_id": "para_486" }, { "text": "have identified no ambiguity in the relevant contractual", "paragraph_id": "para_487" }, { "text": "provisions, we give effect to “the clear intent of the parties to", "paragraph_id": "para_488" }, { "text": "the agreement.”6 See Koch Gateway Pipeline Co. v. FERC,", "paragraph_id": "para_489" }, { "text": "136 F.3d 810, 814 (D.C. Cir. 1998); see also, e.g., Okla. Gas,", "paragraph_id": "para_490" }, { "text": "11 F.4th at 827.", "paragraph_id": "para_491" }, { "text": "5 After the case was submitted, the court received information that", "paragraph_id": "para_492" }, { "text": "Basin Electric and Northwest Rural resolved their dispute regarding", "paragraph_id": "para_493" }, { "text": "Northwest Rural’s exit from Tri-State. The court also learned that", "paragraph_id": "para_494" }, { "text": "other Eastern Interconnection members had reportedly tendered", "paragraph_id": "para_495" }, { "text": "withdrawal notices. This information does not change our standing", "paragraph_id": "para_496" }, { "text": "analysis. The Commission’s interpretation of the Basin/Tri-State", "paragraph_id": "para_497" }, { "text": "Agreement affects any Eastern Interconnection member’s attempt to", "paragraph_id": "para_498" }, { "text": "depart from Tri-State.", "paragraph_id": "para_499" }, { "text": "6 The parties agree that the relevant provisions in the Basin/Tri-", "paragraph_id": "para_500" }, { "text": "State Agreement are unambiguous. See Petitioner’s Br. 43; Oral", "paragraph_id": "para_501" }, { "text": "Argument at 1:33–1:45; Respondent’s Br. 46–47.", "paragraph_id": "para_502" }, { "text": "17", "paragraph_id": "para_503" }, { "text": "IV.", "paragraph_id": "para_504" }, { "text": "The provisions in the Basin/Tri-State Agreement “must be", "paragraph_id": "para_505" }, { "text": "understood according to [their] plain meaning, which we draw", "paragraph_id": "para_506" }, { "text": "from [their] text and context.” Okla. Gas, 11 F.4th at 827.", "paragraph_id": "para_507" }, { "text": "The crux of this case is the proper interpretation of section 9 of", "paragraph_id": "para_508" }, { "text": "the Basin/Tri-State Agreement, which provides:", "paragraph_id": "para_509" }, { "text": "Tri-State shall not without the approval in", "paragraph_id": "para_510" }, { "text": "writing of [Basin] . . . take or suffer to be taken", "paragraph_id": "para_511" }, { "text": "any steps . . . to sell, lease or transfer (or make", "paragraph_id": "para_512" }, { "text": "any agreement therefore) all or a substantial", "paragraph_id": "para_513" }, { "text": "portion of its assets, located in the Eastern", "paragraph_id": "para_514" }, { "text": "Interconnection . . . . Notwithstanding the", "paragraph_id": "para_515" }, { "text": "foregoing, Tri-State may take or suffer to be", "paragraph_id": "para_516" }, { "text": "taken any steps for reorganization or to", "paragraph_id": "para_517" }, { "text": "consolidate with or merge into any corporation,", "paragraph_id": "para_518" }, { "text": "or to sell, lease or transfer (or make any", "paragraph_id": "para_519" }, { "text": "agreement therefore) all or a substantial portion", "paragraph_id": "para_520" }, { "text": "of its assets, located in the Eastern", "paragraph_id": "para_521" }, { "text": "Interconnection . . . so long as Tri-State shall", "paragraph_id": "para_522" }, { "text": "pay such pro rata portion of the outstanding", "paragraph_id": "para_523" }, { "text": "indebtedness, as well as other obligations and", "paragraph_id": "para_524" }, { "text": "commitments of [Basin] at the time existing, as", "paragraph_id": "para_525" }, { "text": "shall be determined by [Basin] and shall", "paragraph_id": "para_526" }, { "text": "otherwise comply with such reasonable terms", "paragraph_id": "para_527" }, { "text": "and conditions as [Basin] shall require.", "paragraph_id": "para_528" }, { "text": "Notwithstanding the foregoing, no such", "paragraph_id": "para_529" }, { "text": "approval shall be required to take the actions", "paragraph_id": "para_530" }, { "text": "contemplated herein so long as the purchaser or", "paragraph_id": "para_531" }, { "text": "surviving organization is a member of [Basin]", "paragraph_id": "para_532" }, { "text": "and has validly authorized, executed and", "paragraph_id": "para_533" }, { "text": "delivered a contract for electric service", "paragraph_id": "para_534" }, { "text": "substantially in the form of this Agreement.", "paragraph_id": "para_535" }, { "text": "18", "paragraph_id": "para_536" }, { "text": "Basin/Tri-State Agreement § 9 [J.A. 189].", "paragraph_id": "para_537" }, { "text": "Section 9 unambiguously supplies Tri-State a mechanism", "paragraph_id": "para_538" }, { "text": "to transfer assets without Basin’s approval. As the", "paragraph_id": "para_539" }, { "text": "Commission found, Northwest Rural’s withdrawal from and", "paragraph_id": "para_540" }, { "text": "cancellation of its agreement with Tri-State constitutes the", "paragraph_id": "para_541" }, { "text": "“transfer” of an “asset” for purposes of section 9. Complaint", "paragraph_id": "para_542" }, { "text": "Order, 189 FERC ¶ 61,164, at PP 76, 81 (“Northwest Rural, as", "paragraph_id": "para_543" }, { "text": "a member of Tri-State, has triggered a transfer for Tri-State’s", "paragraph_id": "para_544" }, { "text": "assets under the contract pursuant to section 9 by virtue of", "paragraph_id": "para_545" }, { "text": "seeking withdrawal.”); see also Oral Argument at 10:53–11:50.", "paragraph_id": "para_546" }, { "text": "And “[n]otwithstanding,” the first sentence of section 9 which", "paragraph_id": "para_547" }, { "text": "affirmatively requires Basin’s approval pre-asset transfer, the", "paragraph_id": "para_548" }, { "text": "second and third sentences expressly permit Tri-State to", "paragraph_id": "para_549" }, { "text": "“transfer” such “assets,” without Basin’s approval, under two", "paragraph_id": "para_550" }, { "text": "scenarios: (1) “so long as Tri-State shall pay such pro rata", "paragraph_id": "para_551" }, { "text": "portion of the outstanding indebtedness, as well as other", "paragraph_id": "para_552" }, { "text": "obligations and commitments of [Basin] at the time existing, as", "paragraph_id": "para_553" }, { "text": "shall be determined by [Basin] and shall otherwise comply with", "paragraph_id": "para_554" }, { "text": "such reasonable terms and conditions as [Basin] shall require,”", "paragraph_id": "para_555" }, { "text": "or (2) if “the purchaser or surviving organization is a member", "paragraph_id": "para_556" }, { "text": "of [Basin] and has validly authorized, executed and delivered a", "paragraph_id": "para_557" }, { "text": "contract for electric service” with Basin. Basin/Tri-State", "paragraph_id": "para_558" }, { "text": "Agreement § 9. Based on the plain language of this provision,", "paragraph_id": "para_559" }, { "text": "we agree with the Commission that section 9 does not prevent", "paragraph_id": "para_560" }, { "text": "Northwest Rural’s withdrawal from Tri-State or constitute a", "paragraph_id": "para_561" }, { "text": "breach of the Basin/Tri-State Agreement given that section 9", "paragraph_id": "para_562" }, { "text": "explicitly prescribes the procedures by which Basin and Tri-", "paragraph_id": "para_563" }, { "text": "State would proceed in the event of Northwest Rural’s exit.", "paragraph_id": "para_564" }, { "text": "Resisting this interpretation, Basin asserts several", "paragraph_id": "para_565" }, { "text": "arguments. We address and reject each in turn.", "paragraph_id": "para_566" }, { "text": "A.", "paragraph_id": "para_567" }, { "text": "Basin asserts that the Commission’s interpretation of", "paragraph_id": "para_568" }, { "text": "19", "paragraph_id": "para_569" }, { "text": "section 9 “[p]ermit[s] Northwest Rural to terminate” the Tri-", "paragraph_id": "para_570" }, { "text": "State/Northwest Agreement which “has the functional effect”", "paragraph_id": "para_571" }, { "text": "of Tri-State terminating the Basin/Tri-State Agreement prior to", "paragraph_id": "para_572" }, { "text": "December 31, 2050. Petitioner’s Br. 37. This is so, Basin", "paragraph_id": "para_573" }, { "text": "posits, because under the Commission’s interpretation, Tri-", "paragraph_id": "para_574" }, { "text": "State could open the door for all six of Tri-State’s Eastern", "paragraph_id": "para_575" }, { "text": "Interconnection members to terminate their agreements with", "paragraph_id": "para_576" }, { "text": "Tri-State, effectively resulting in complete early termination of", "paragraph_id": "para_577" }, { "text": "the Basin/Tri-State Agreement. For this reason, according to", "paragraph_id": "para_578" }, { "text": "Basin, the Commission’s interpretation of section 9 is", "paragraph_id": "para_579" }, { "text": "“inconsistent” with section 14, id. at 41, and renders section 14", "paragraph_id": "para_580" }, { "text": "“superfluous,” id. at 36.", "paragraph_id": "para_581" }, { "text": "We disagree. The Commission’s interpretation gave", "paragraph_id": "para_582" }, { "text": "independent effect to section 14 of the Basin/Tri-State", "paragraph_id": "para_583" }, { "text": "Agreement, which governs the “Term” of the contract and", "paragraph_id": "para_584" }, { "text": "provides that the contract “shall remain in effect until", "paragraph_id": "para_585" }, { "text": "December 31, 2050.” Basin/Tri-State Agreement § 14. As", "paragraph_id": "para_586" }, { "text": "the Commission found, “Tri-State would continue to be bound”", "paragraph_id": "para_587" }, { "text": "by the Basin/Tri-State Agreement, per section 14,", "paragraph_id": "para_588" }, { "text": "“notwithstanding Northwest Rural’s departure,” which is", "paragraph_id": "para_589" }, { "text": "permissible under section 9. Rehearing Order, 191 FERC", "paragraph_id": "para_590" }, { "text": "¶ 61,087, at P 28.", "paragraph_id": "para_591" }, { "text": "Further, Tri-State’s transfer of a single asset (Northwest", "paragraph_id": "para_592" }, { "text": "Rural) is not equivalent to its termination of the entire contract.", "paragraph_id": "para_593" }, { "text": "And, as the Commission explained, the “hypothetical” scenario", "paragraph_id": "para_594" }, { "text": "“in which all six of Tri-State’s Eastern Interconnection", "paragraph_id": "para_595" }, { "text": "members withdraw from Tri-State” is “outside the scope of this", "paragraph_id": "para_596" }, { "text": "proceeding.” Rehearing Order, 191 FERC ¶ 61,087, at P 28.", "paragraph_id": "para_597" }, { "text": "Thus, contrary to Basin’s assertions, neither the Commission’s", "paragraph_id": "para_598" }, { "text": "Order nor its interpretation of section 9 permits Tri-State to", "paragraph_id": "para_599" }, { "text": "“elect to terminate” its agreements with all six of its Eastern", "paragraph_id": "para_600" }, { "text": "Interconnection members as an end run around the section 14", "paragraph_id": "para_601" }, { "text": "prohibition on early termination. See Petitioner’s Br. 38–39.", "paragraph_id": "para_602" }, { "text": "20", "paragraph_id": "para_603" }, { "text": "Should such a scenario unfold, the Commission can address", "paragraph_id": "para_604" }, { "text": "Basin’s arguments pertaining to such a situation in a future", "paragraph_id": "para_605" }, { "text": "proceeding. See Tenn. Gas Pipeline Co. v. FERC, 972 F.2d", "paragraph_id": "para_606" }, { "text": "376, 381 (D.C. Cir. 1992) (“Surely [the Commission] has as", "paragraph_id": "para_607" }, { "text": "much or more discretion to decide whether to take up a merely", "paragraph_id": "para_608" }, { "text": "potential problem, one that may or may not materialize soon", "paragraph_id": "para_609" }, { "text": "enough.”).", "paragraph_id": "para_610" }, { "text": "B.", "paragraph_id": "para_611" }, { "text": "Basin also faults the Commission for not fully engaging", "paragraph_id": "para_612" }, { "text": "with section 9’s “reasonable terms and conditions” language or", "paragraph_id": "para_613" }, { "text": "with that language’s effect on “Tri-State’s disposition of", "paragraph_id": "para_614" }, { "text": "assets.” Petitioner’s Br. 32–33. For one, contrary to Basin’s", "paragraph_id": "para_615" }, { "text": "argument, the Commission explicitly addressed the", "paragraph_id": "para_616" }, { "text": "“reasonable terms and conditions” language and concluded that", "paragraph_id": "para_617" }, { "text": "this language could not be read in such a way that it would", "paragraph_id": "para_618" }, { "text": "“effectively prevent” Tri-State from disposing of assets (like", "paragraph_id": "para_619" }, { "text": "Northwest Rural) which is otherwise permitted by section 9.", "paragraph_id": "para_620" }, { "text": "Rehearing Order, 191 FERC ¶ 61,087, at P 27. Additionally,", "paragraph_id": "para_621" }, { "text": "the Commission’s holding was intentionally narrow; it ruled", "paragraph_id": "para_622" }, { "text": "only that Northwest Rural’s withdrawal would not necessarily", "paragraph_id": "para_623" }, { "text": "be a breach because section 9 of the contract permits Tri-State", "paragraph_id": "para_624" }, { "text": "to dispose of some of its assets in the Eastern Interconnection", "paragraph_id": "para_625" }, { "text": "prior to 2050. Id.; see also Complaint Order, 189 FERC", "paragraph_id": "para_626" }, { "text": "¶ 61,164, at P 78 (explaining that “under the terms of the Basin", "paragraph_id": "para_627" }, { "text": "[Agreement], as long as the parties meet the requirements of", "paragraph_id": "para_628" }, { "text": "section 9, then Tri-State would not be in breach of the Basin", "paragraph_id": "para_629" }, { "text": "[Agreement] following Northwest Rural’s withdrawal [from", "paragraph_id": "para_630" }, { "text": "Tri-State]”). As the Commission explained, in ruling on", "paragraph_id": "para_631" }, { "text": "Northwest Rural’s complaint it need not “determine the amount", "paragraph_id": "para_632" }, { "text": "Tri-State must pay Basin to comply with section 9’s conditions", "paragraph_id": "para_633" }, { "text": "should Northwest Rural withdraw from Tri-State, nor did the", "paragraph_id": "para_634" }, { "text": "Complaint request such a determination.” Rehearing Order,", "paragraph_id": "para_635" }, { "text": "191 FERC ¶ 61,087, at P 27. Because the Commission is", "paragraph_id": "para_636" }, { "text": "21", "paragraph_id": "para_637" }, { "text": "entitled to proceed “one step at a time,” Interstate Nat. Gas", "paragraph_id": "para_638" }, { "text": "Ass’n of Am. v. FERC, 285 F.3d 18, 35 (D.C. Cir. 2002), the", "paragraph_id": "para_639" }, { "text": "Commission’s reluctance to make determinations beyond the", "paragraph_id": "para_640" }, { "text": "scope of the Complaint does not render its decision arbitrary or", "paragraph_id": "para_641" }, { "text": "capricious, see id. (“[T]he Commission is free to undertake", "paragraph_id": "para_642" }, { "text": "reform one step at a time. We can overturn its gradualism only", "paragraph_id": "para_643" }, { "text": "if it truly yields unreasonable discrimination or some other kind", "paragraph_id": "para_644" }, { "text": "of arbitrariness.” (citation modified)). The questions left", "paragraph_id": "para_645" }, { "text": "unanswered by the Commission’s Order can be addressed in", "paragraph_id": "para_646" }, { "text": "future Commission proceedings and do not render the", "paragraph_id": "para_647" }, { "text": "Commission’s decision arbitrary or capricious.", "paragraph_id": "para_648" }, { "text": "C.", "paragraph_id": "para_649" }, { "text": "Additionally, Basin contends that the Commission’s", "paragraph_id": "para_650" }, { "text": "interpretation of section 9 is contrary to its interpretation of a", "paragraph_id": "para_651" }, { "text": "similar provision in the Tri-State/Northwest Agreement. But", "paragraph_id": "para_652" }, { "text": "the Commission, in interpreting the Tri-State/Northwest", "paragraph_id": "para_653" }, { "text": "Agreement provision, determined only that it did “not directly", "paragraph_id": "para_654" }, { "text": "address the fee that a withdrawing member should pay” and did", "paragraph_id": "para_655" }, { "text": "“not apply to member withdrawals.” Rehearing Order, 191", "paragraph_id": "para_656" }, { "text": "FERC ¶ 61,087, at P 29 (citing Tri-State Generation &", "paragraph_id": "para_657" }, { "text": "Transmission Ass’n, 185 FERC ¶ 61,201, at P 228 (2023)).", "paragraph_id": "para_658" }, { "text": "Importantly, unlike here, the Tri-State/Northwest Agreement", "paragraph_id": "para_659" }, { "text": "proceedings did not involve a Tri-State member’s asset", "paragraph_id": "para_660" }, { "text": "transfer, only a Tri-State member’s termination of the entire", "paragraph_id": "para_661" }, { "text": "agreement. The analogous situation under the Basin/Tri-State", "paragraph_id": "para_662" }, { "text": "Agreement would be Tri-State’s withdrawal from Basin. But", "paragraph_id": "para_663" }, { "text": "that is not the situation. Rather, Northwest Rural, which is not", "paragraph_id": "para_664" }, { "text": "a member of Basin, seeks to withdraw from Tri-State. And", "paragraph_id": "para_665" }, { "text": "Northwest Rural’s withdrawal, in turn, constitutes a transfer of", "paragraph_id": "para_666" }, { "text": "assets by Tri-State. The Commission’s interpretations of", "paragraph_id": "para_667" }, { "text": "these provisions, accordingly, are not incongruent.", "paragraph_id": "para_668" }, { "text": "22", "paragraph_id": "para_669" }, { "text": "D.", "paragraph_id": "para_670" }, { "text": "Basin further claims that the Commission’s interpretation", "paragraph_id": "para_671" }, { "text": "is inconsistent with the purpose of the Basin/Tri-State", "paragraph_id": "para_672" }, { "text": "Agreement “and rural electric cooperative wholesale power", "paragraph_id": "para_673" }, { "text": "contracts in general.” Petitioner’s Br. 42. This argument is a", "paragraph_id": "para_674" }, { "text": "non-starter. The Basin/Tri-State Agreement’s choice-of-law", "paragraph_id": "para_675" }, { "text": "provision declares that Nebraska law governs. And as the", "paragraph_id": "para_676" }, { "text": "Commission observed, “[u]nder Nebraska law, where the", "paragraph_id": "para_677" }, { "text": "relevant contractual term is unambiguous, it is accorded its", "paragraph_id": "para_678" }, { "text": "plain and ordinary meaning [and] Section 9 unambiguously", "paragraph_id": "para_679" }, { "text": "permits Northwest Rural to withdraw from Tri-State without", "paragraph_id": "para_680" }, { "text": "breach of the [Basin/Tri-State Agreement].” Rehearing", "paragraph_id": "para_681" }, { "text": "Order, 191 FERC ¶ 61,087, at P 30 (citing Main St. Props. LLC", "paragraph_id": "para_682" }, { "text": "v. City of Bellevue, 13 N.W.3d 911, 925–26 (Neb. 2024); Eagle", "paragraph_id": "para_683" }, { "text": "Partners, LLC v. Rook, 921 N.W.2d 98, 107 (Neb. 2018)).", "paragraph_id": "para_684" }, { "text": "Basin concedes that the Basin/Tri-State Agreement is", "paragraph_id": "para_685" }, { "text": "unambiguous. See Petitioner’s Br. 43; Oral Argument at", "paragraph_id": "para_686" }, { "text": "1:33–1:45. Consequently, the Commission properly declined", "paragraph_id": "para_687" }, { "text": "to consider the purpose of the Basin/Tri-State Agreement in", "paragraph_id": "para_688" }, { "text": "interpreting its provisions.", "paragraph_id": "para_689" }, { "text": "E.", "paragraph_id": "para_690" }, { "text": "Finally, Basin argues that the Commission’s decision is", "paragraph_id": "para_691" }, { "text": "inconsistent with three federal court decisions. But each is", "paragraph_id": "para_692" }, { "text": "factually distinguishable. And separately, none of the cases", "paragraph_id": "para_693" }, { "text": "Basin points to were binding on the Commission nor are they", "paragraph_id": "para_694" }, { "text": "binding on this court.", "paragraph_id": "para_695" }, { "text": "In Shoshone River Power, Inc., Tri-State asserted that its", "paragraph_id": "para_696" }, { "text": "long-term wholesale power contract with its member,", "paragraph_id": "para_697" }, { "text": "Shoshone, prevented Shoshone from voluntarily disposing of", "paragraph_id": "para_698" }, { "text": "substantially all of its assets so that it would eliminate its", "paragraph_id": "para_699" }, { "text": "purchase needs from Tri-State and effectively cease to remain", "paragraph_id": "para_700" }, { "text": "in business. 874 F.2d at 1350. The Tenth Circuit found “that", "paragraph_id": "para_701" }, { "text": "23", "paragraph_id": "para_702" }, { "text": "Shoshone ha[d] an implied obligation to remain in business and", "paragraph_id": "para_703" }, { "text": "not to eliminate its requirements” because “the fulfillment of", "paragraph_id": "para_704" }, { "text": "Shoshone’s contractual undertakings necessarily implies the", "paragraph_id": "para_705" }, { "text": "continuance of Shoshone’s system.” Id. at 1360. But the", "paragraph_id": "para_706" }, { "text": "court also explained that Shoshone would not have violated the", "paragraph_id": "para_707" }, { "text": "contract if the elimination of its requirements were due to “an", "paragraph_id": "para_708" }, { "text": "unavoidable circumstance.” Id. For example, if Shoshone’s", "paragraph_id": "para_709" }, { "text": "customers chose to reduce their power consumption by", "paragraph_id": "para_710" }, { "text": "producing their own electricity or if industrial customers chose", "paragraph_id": "para_711" }, { "text": "to close their facilities. Id.", "paragraph_id": "para_712" }, { "text": "Shoshone does not support Basin’s view. For one, Tri-", "paragraph_id": "para_713" }, { "text": "State is not disposing of substantially all of its assets and", "paragraph_id": "para_714" }, { "text": "effectively ceasing to remain in business; rather one of Tri-", "paragraph_id": "para_715" }, { "text": "State’s members is withdrawing from Tri-State. For another,", "paragraph_id": "para_716" }, { "text": "as the Commission observed, this case is more akin to the", "paragraph_id": "para_717" }, { "text": "“unavoidable circumstance” mentioned in Shoshone. Id.", "paragraph_id": "para_718" }, { "text": "Tri-State is facing the unavoidable circumstance of one of its", "paragraph_id": "para_719" }, { "text": "members, Northwest Rural, attempting to withdraw. See", "paragraph_id": "para_720" }, { "text": "Rehearing Order, 191 FERC ¶ 61,087, at P 31. It is", "paragraph_id": "para_721" }, { "text": "Northwest Rural’s withdrawal that would reduce Tri-State’s", "paragraph_id": "para_722" }, { "text": "energy requirements, not anything Tri-State has voluntarily", "paragraph_id": "para_723" }, { "text": "done to eliminate its own purchasing needs. Thus, nothing in", "paragraph_id": "para_724" }, { "text": "Shoshone undermines the Commission’s reasoning.", "paragraph_id": "para_725" }, { "text": "And neither Dakota Energy Cooperative, Inc. v. East River", "paragraph_id": "para_726" }, { "text": "Electric Power Cooperative, Inc., 75 F.4th 870, 875–77 (8th", "paragraph_id": "para_727" }, { "text": "Cir. 2023), nor Marlboro Electric Cooperative, Inc. v. Central", "paragraph_id": "para_728" }, { "text": "Electric Power Cooperative, Inc., No. 4:20-CV-4386 (D.S.C.", "paragraph_id": "para_729" }, { "text": "Mar. 28, 2022), ECF No. 95, offers support to Basin. Both", "paragraph_id": "para_730" }, { "text": "cases involved a cooperative member, like Tri-State, who", "paragraph_id": "para_731" }, { "text": "sought to terminate its all-requirements contract with a", "paragraph_id": "para_732" }, { "text": "cooperative supplier, like Basin. Dakota Energy, 75 F.4th at", "paragraph_id": "para_733" }, { "text": "872; Marlboro Elec., slip op. at 3. Basin’s reliance on these", "paragraph_id": "para_734" }, { "text": "cases depends entirely on its asserted hypothetical situation that", "paragraph_id": "para_735" }, { "text": "24", "paragraph_id": "para_736" }, { "text": "the Commission’s ruling paved the way for all of Tri-State’s", "paragraph_id": "para_737" }, { "text": "members to withdraw and thus for Tri-State to “effectively”", "paragraph_id": "para_738" }, { "text": "seek early termination of the Basin/Tri-State Agreement by", "paragraph_id": "para_739" }, { "text": "eliminating all of its energy requirements. Petitioner’s Br. 49–", "paragraph_id": "para_740" }, { "text": "50. But, as the Commission found, this case arises out of Tri-", "paragraph_id": "para_741" }, { "text": "State’s transfer of a single asset—Northwest Rural—not of any", "paragraph_id": "para_742" }, { "text": "attempt by Tri-State to terminate the Basin/Tri-State", "paragraph_id": "para_743" }, { "text": "Agreement. Dakota Energy and Marlboro Electric are", "paragraph_id": "para_744" }, { "text": "accordingly inapposite.", "paragraph_id": "para_745" }, { "text": "V.", "paragraph_id": "para_746" }, { "text": "The Commission correctly determined that the plain and", "paragraph_id": "para_747" }, { "text": "unambiguous language of section 9 provides a mechanism for", "paragraph_id": "para_748" }, { "text": "Northwest Rural to withdraw from Tri-State and thus", "paragraph_id": "para_749" }, { "text": "Northwest Rural’s withdrawal does not constitute a breach of", "paragraph_id": "para_750" }, { "text": "the Basin/Tri-State Agreement. The Commission’s", "paragraph_id": "para_751" }, { "text": "determination was therefore neither arbitrary nor capricious.", "paragraph_id": "para_752" }, { "text": "We accordingly deny Basin’s petitions.", "paragraph_id": "para_753" }, { "text": "So ordered.", "paragraph_id": "para_754" } ], "word_count": 5986, "cites": [ "504\nU.S. 555", "716 F.3d 653", "170 F.4th 1254", "874 F.2d 1346", "141 F.4th 1296", "913 F.3d 127", "125 F.4th 1139", "707 F.3d 364", "984 F.2d 426", "45 F.4th 1004", "90 F.4th 579", "11\nF.4th 821", "136 F.3d 810", "972 F.2d\n376", "285 F.3d 18", "75 F.4th 870" ], "cited_by": [], "sha256": "feaa036d2f1582ad4028e5f27b9b751209fcb45ff69a569439fb33a8614576ec", "source_url": "https://media.cadc.uscourts.gov/opinions/docs/2026/10/25-1060-2195997.pdf", "fetched_at": "2026-10-05T14:02:48.608+00:00", "canonical": "https://legal.exploreworldai.com/ai/judgments/us/cadc-25-1060-2026-10-02", "risk_graph": "https://legal.exploreworldai.com/api/public/v1/risk?id=us:cadc-25-1060-2026-10-02", "relations_graph": "https://legal.exploreworldai.com/api/public/v1/relations?id=us:cadc-25-1060-2026-10-02", "changes": "https://legal.exploreworldai.com/api/public/v1/us-praxis/changes", "agent": "https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:cadc-25-1060-2026-10-02", "verification": { "stored_sha256": "feaa036d2f1582ad4028e5f27b9b751209fcb45ff69a569439fb33a8614576ec", "recomputed_sha256": "feaa036d2f1582ad4028e5f27b9b751209fcb45ff69a569439fb33a8614576ec", "intact": true, "checked_at": "2026-10-05T14:02:50.902Z" } }, "hash": "sha256:bb9c30278052c1c3640aec054eb74028ce67709a6e4ad75026da071e5ac20485", "version": "legal-2026-10-05", "expires": "2026-10-06T00:00:00.000Z", "dependency": { "index_version": "legal-2026-10-05+legal-2026-10-05+2026-10-05T10:53:35", "content_hash": "sha256:bb9c30278052c1c3640aec054eb74028ce67709a6e4ad75026da071e5ac20485", "revalidate_after": "2026-10-05T15:02:51.064Z", "max_copy_age_seconds": 3600, "policy": "revalidate-required; attribution-preferred", "changelog": "https://legal.exploreworldai.com/api/public/v1/dependency", "verify": "https://legal.exploreworldai.com/api/public/v1/verify", "stale_copy_invalid": true }, "canonical": "https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cadc-25-1060-2026-10-02", "disclaimer": "Source reference with official identifier. 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