Amicus Curiae Brief — Fed. Energy Regulatory Comm'n v. Elec. Power Supply Ass'n, 135 S. Ct. 2049 (2015) (No. 14-840)

Supreme Cour, US.

FILED

SEP ~8 2015

OFFICE OF THF CLERK

Nos. 14-840, -841

In the Supreme Court of the United States

FEDERAL ENERGY REGULATORY COMMISSION,

Petitioner,

Vv

ELECTRIC POWER SUPPLY ASSOCIATION, Fr Ax.,

Respondents.

EnerNOC, INc., &T AL.,

Petitioners,

v

ELECTRIC POWER SUPPLY ASSOCIATION, er ax.,

Respondents.

On Writs of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

BRIEF OF AMICI CURIAE NUCLEAR ENERGY INSTITUTE

AND AMERICA’S NATURAL GAS ALLIANCE IN SUPPORT

OF THE RESPONDENTS

ELLEN C. GINSBERG

NUCLEAR ENERGY INSTITUTE

1201 F St., NW, Suite 1100

Washington, DC 20004

(202) 739-8000

Counsel for Amici Curiae

Davin T. Door

Erick M. SANDLER*

JOHN W. CERRETA

JENNIFER E. GALIETTE

Day Prrnezy LLP

242 Trumbull Street

Hartford, CT 06103-1212

(860) 275-0100

emsandler@daypitney.com

JosePH H. FaGan

Day Prrney LLP

1100 New York Ave, NW

Surre 300

Wasuincton, DC 20005

*Counsel of Record

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES iii

INTEREST OF AMICI CURIAE 1

SUMMARY OF ARGUMENT 4

ARGUMENT 7

I. FERC’S FAILURE TO ENGAGE THE SERIOUS

OBJECTIONS TO ITS APPROACH

RENDERS ORDER 745 ARBITRARY AND

CAPRICIOUS 7

Il. ORDER 745 IS ALSO UNLAWFUL,

ARBITRARY AND CAPRICIOUS BECAUSE IT

FAILS TO JUSTIFY THE ADVERSE IMPACT

ITS PREFERENTIAL RATES WOULD HAVE

ON GENERATION RESOURCES,

PARTICULARLY THE NUCLEAR AND

NATURAL GAS INDUSTRIES 10

A. Preferred Prices For Demand Response

Would Threaten the Diverse Supply Portfolio

by Depressing Market Clearing Prices Paid

To All Supply Resources 12

B. Suppression Of Wholesale Market

Clearing Prices Could Have Serious

Repercussions For The Nuclear And Natural

Gas Industries 16

il

1. Current market prices, even without

suppression from demand response

subsidies, are already challenging the

viability of certain nuclear power plants,

and inappropriate suppression of market

prices will further compound those

challenges

2. Improperly suppressed market prices

could limit the efficient deployment of

natural gas generation and the

development of new natural gas

generation facilities

CONCLUSION

16

23

27

iii

TABLE OF AUTHORITIES

CASES

Am. Gas Ass’n v. FERC,

593 F.3d 14 (D.C. Cir. 2010) 8

Farmers Union Cent. Exch. v. FERC,

734 F.2d 1486 (D.C. Cir. 1984) 12

K N Energy, Inc. v. FERC,

968 F.2d 1295 (D.C. Cir. 1992) 8

Morgan Stanley Capital Grp. Inc. v. Public Util.

Dist. No. 1,

554 U.S. 527 (2008) 7

Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State

Farm Mut. Auto. Ins. Co.,

463 U.S. 29 (1983) 7

NorAm Gas Transmission Co. v. FERC,

148 F.3d 1158 (D.C. Cir. 1998) 7

STATUTES

5 U.S.C. § 706(2)(A) 7

16 U.S.C. § 824d(b) 4,7

16 U.S.C. § 824e(a) 4,7

OTHER AUTHORITIES

American Gas Association, Jdentifying Key

Economic Impacts of Recent Increases in U.S.

Natural Gas Production (May 22, 2012),

https://www.aga.org/identifying-key-economic-

impacts-recent-increases-us-natural-gas-

production-may-22-20node2 23

iV

American Gas Association, Natural Gas is the

Cleanest and Most Efficient Fossil Fuel,

https://www.aga.org/climate-change-and-

environmental-analysis (last visited Sept. 3,

2015) 23, 24

American Gas Association, Natural Gas: Rewriting

Our Energy Future, https://www.aga.org/natur

al-gas-rewriting-our-energy-future 24

Mark Berkman & Dean Murphy, The Brattle

Group, The Nuclear Industry’s Contribution to

the U.S. Economy (July 7, 2015), http://www.nuc

learmatters.com/resources/reports-studies/docu

ment/Nuclear-Matters-Report_Value-of-Nuclear

pdf 22

Samuel Brinton and Josh Freed, When Nuclear

Ends: How Nuclear Retirements Might

Undermine Clean Power Plan Progress (Aug. 21,

2015), http://www.nuclearmatters.com/resources

/reports-studies/document/when-nuclear-ends-

how-nuclear-retirements-might-undermine-

clean-power-plan-progress.pdf 20, 21

Centralized Capacity Market Design Elements,

FERC Docket No. AD13-7, FERC Staff Report,

(Aug. 23, 2013), http://www.ferc.gov/Calendar

Files/20130826142258-Staff%20Paper. pdf 14

Demand Response Compensation in Organized

Wholesale Energy Markets, FERC

Docket No. RM10-17, comments of EEI (May 13,

2010) 10, 11

Vv

FERC Examination of the Environmental

Protection Agency’s Clean Power Plan, FERC

Docket No. AD15-4 (Feb. 23, 2015) 18, 19, 20

THS Energy, The Value of US Power Supply

Diversity (July 2014), http://www.nei.org/Master

-Document-Folder/Backgrounders.Reports-And

-Studies/IHS-Energy-Study-The-Value-of-US-

Power-Supply-Dive 14, 17, 20, 21

Joint Technical Conference on New York Markets &

Infrastructure, FERC Docket No. AD14-18,

Written Statement of Dr. David Patton, Market

Monitoring Unit for the New York Independent

System Operator (Nov. 5, 2014), http://www.ferc

.gov/CalendarFiles/20141119133149-D%20Patto

n%20Written®%20Statement_11-5-14.pdf 14,15

Letter from Amy Farrell, Vice President, Market

Development, America’s Natural Gas Alliance,

to Howard Schneider, Esq., Chair, Board of

Managers, PJM Interconnection, LLC (Nov. 11,

2014) http://anga.us/media/testimony/D363FD0

E-5056-9F69-D4A648C9F6086D00/files/Final%

20PJM%20Capacity%20Assurance%20Proposa

1%20111114.pdf

Letter from Joint Trade Associations to FERC on

Price Formation Reform Principles (Mar. 6,

2015), http://www.nei.org/CorporateSite/media

/filefolder/Policy/Market/Joint-Trade-Assns-

Letter-to-FERC-on-Price-Formation-Principles.

pdf?ext=.pdf

2

vi

Letter from NEI, Edison Electric Institute, and

Electric Power Supply Association to Cheryl

LaFleur, Chairman, FERC, in Docket Number

AD14-8-000 (Technical Conference on Winter

2013-2014 Operations and Market Performance

in Regional Transmission Organizations and

Independent System Operators) (Apr. 23, 2014),

http://www.eei.org/issuesandpolicy/generation/

Documents/Joint_EPSA_NEI EEI Letter 042

314.pdf 2

Midcontinent Independent System Operator, Inc.,

2013-2014 MISO Cold Weather Operations

Report (Nov. 2014), https://www.misoenergy.org

/Library/Repository/Report/Seasonal%20Marke

t%20Assessments/2013-2014%20Cold%20Weath

her %20Operations%20Report. pdf 19

John Miller, Why Expanded Alternative Energy

Increases the Need for Natural Gas (Jan. 29,

2013), http://www.theenergycollective.com/jemi

llerep/178096/expanded-wind-and-solar-power-

increase-need-natural-gas 24

MIT Energy Institute, Press Release, Grid

Reliability and the Role of Natural Gas (May 6,

2014), http://mitei.mit.edu/news/grid-reliability-

and-role-natural-gas 25

MIT Energy Initiative Analysis, Report from

Growing Concerns, Possible Solutions: The

Interdependency of Natural Gas and Electricity

Systems (Apr. 16, 2013), http://mitei.mit.edu/sys

tem/files/20 14-MITEI-Report-Growing-Concerns

-Possible-Solutions.pdf 25

Vil

NEI, Nuclear Plant Shutdowns Reveal Market

Problems (Nov. 17, 2014), http:/Awww.nei.org/N

ews-Media/News/News-Archives/Nuclear-Plant-

Shutdowns-Reveal-Market-Problems 2

North American Electric Reliability Corporation,

Polar Vortex Review (Sept. 2014), http//www.ner

c.com/pa/rrm/January%202014%20Polar%20V

ortex%20Review/Polar_Vortex_Review_29 Sep

t_2014 Final.pdf 19

Nuclear Matters, Fact Sheet on Challenges Facing

Nuclear Energy Plants (June 2014),

http://www.nuclearmatters.com/resources/fact-

sheets/document/7-Nuclear-Matters-Challenges-

Facing-Nuclear-Energy-Plants.pdf 20

Thomas Overton, Three of Exelon’s Nuke Plants

Fail to Clear PJM Auction Despite Jump in

Payments, Power (Aug. 24, 2015),

http://www.powermag.com/three-of-exelons-

nuke-plants-fail-to-clear-pjm-auction-despite-

jump-in-payments 20

Thomas Overton, U.S. Faces Wave of Premature

Nuclear Retirements, Power (Jan. 14, 2015),

http://www.powermag.com/u-s-faces-wave-of-

premature-nuclear-retirements/ 20

Price Formation in Energy and Ancillary Services

Markets Operated by Regional Transmission

Organizations and Independent Systems

Operators, FERC Docket No. AD14-14,

comments of ANGA. (ifar. 6, 2015) 3,17

Vill

Technical Conference on Centralized Capacity

Markets in Regional Transmission

Organizations and Independent System

Operators, FERC Docket No. AD13-7, David B.

Patton, Ph.D., President, Potomac Economics,

Resource Adequacy in the Wholesale Electricity

Markets: Principles and Lessons Learned (Sept.

25, 2013), http://www.ferc.gov/CalendarFiles/20

20130925092436-Patton,%20Potomac%20Econo

mics.pdf 15, 17

U.S. Energy Information Administration, Electric

Power Monthly, Table 6.7.B. Capacity Factors

for Utility Scale Generators Not Primarily Using

Fossil Fuels, January 2013-June 2015,

http://www.eia.gov/electricity/monthly/epm_ta

ble_grapher.cfm?t=epmt_6_07_b (last visited

Sept. 3, 2015) 18

U.S. Energy Information Administration, How

much carbon dioxide is produced when different

fuels are burned?, http://www.eia.gov/tools/faqs

faq.cfm?id=73&t=11 23, 24

1

Amici curiae, in their individual capacities,

respectfully submit this brief in support of Respondents

on the second question presented for this Court’s

review: Whether Order 745 is arbitrary and capricious.

135 S. Ct. 2049 (2015).

INTEREST OF AMICI CURIAE'

Amici curiae Nuclear Energy Institute and

America’s Natural Gas Alliance are trade organizations

that represent the nuclear-power and gas-producing

industries, respectively. Amici join together in this

brief because they share an overriding interest in

ensuring that the Federal Energy Regulatory

Commission (“FERC”) maintains just and reasonable

rates in the wholesale electricity market.

NUCLEAR ENERGY INSTITUTE (“NEI”)

NEI’s mission is to foster the beneficial uses of

nuclear technology and to communicate accurate

information about the importance of nuclear energy

and technology. NEI is responsible for developing and

advocating on legal, regulatory and policy matters

affecting the nuclear energy industry. NEI has more

than 350 members, spread across 17 countries, and

they include all the companies licensed to operate

commercial nuclear power plants in the United States,

' Letters reflecting the parties’ consent to the filing of this brief

have been filed with the Clerk of Court pursuant to Supreme Court

Rule 37.3(a). Pursuant to Supreme Court Rule 37.6, counsel for

amici represent that no counsel for a party authored any part of

this brief, and no person, other than amici and their counsel, made

any monetary contribution to the preparation or submission of this

brief.

2

as well as nuclear plant designers, major architectural

and engineering firms, entities that process nuclear

fuel, and other organizations involved in the nuclear

power industry.

Preserving existing nuclear generation is essential

if the United States is to maintain a highly reliable

electric grid, retain a diversified energy portfolio to

manage inherent production cost risk, and

substantially and sustainably reduce carbon emissions

in the face of a growing economy. Preserving existing

nuclear generation and developing future generation

requires full valuation of the benefits and services

nuclear generation provides. That is not happening in

the current wholesale power market and existing

market flaws are already distorting wholesale prices.’

The failure of the market to value nuclear benefits fully

has resulted in uneconomic retirement and

replacement of existing, cost-effective nuclear

generation sources, and that situation would only grow

? NEI has noted to FERC these concerns with the wholesale power

markets. See, e.g., Letter from Joint Trade Associations to FERC

on Price Formation Reform Principles (Mar. 6, 2015),

http://www.nei.org/CorporateSite/media/filefolder/Policy/Market/

Joint-Trade-Assns-Letter-to-FERC-on-Price-Formation-

Principles.pdf?ext=.pdf; Letter from NEI, Edison Electric Institute

(“EEI”), and Electric Power Supply Association (“EPSA”) to Cheryl

LaFleur, Chairman, FERC, in Docket Number AD14-8-000

(Technical Conference on Winter 2013-2014 Operations and

Market Performance in Regional Transmission Organizations and

Independent System Operators) (Apr. 23, 2014),

http://www.eei.org/issuesandpolicy/generation/Documents/Joint_

EPSA_NEI EEI_Letter_042314 pdf; NEI, Nuclear Plant

Shutdowns Reveal Market Problems (Nov. 17, 2014),

http://www.nei.org/News-Media/News/News-Archives/Nuclear-

Plant-Shutdowns-Reveal-Market-Problems.

3

worse if Order 745 were to be implemented. Amicus

NEI thus has a strong interest in the rejection of this

arbitrary and capricious ruling by FERC.

AMERICA’S NATURAL GAS ALLIANCE (“ANGA”)

Amicus ANGA represents America’s leading

independent natural gas exploration and production

companies. ANGA works with industry, government,

and customer stakeholders to ensure the continued

availability of natural gas and to promote the increased

use of this abundant domestic resource for a clean and

secure energy future. Representing both energy

producers and consumers, ANGA has a keen interest in

the production of electricity from clean-burning,

affordable natural gas. ANGA has participated in state

and federal proceedings to insure that wholesale power

prices fully track market fundamentals and properly

compensate sellers.’

Efficient deployment of natural gas generation

depends on the full valuation of the benefits and

services that it provides. Natural gas-fired generators

currently provide almost a quarter of the nation’s

* See, e.g., Price Formation in Energy and Ancillary Services

Markets Operated by Regional Transmission Organizations and

Independent Systems Operators, FERC Docket No. AD14-14,

comments of ANGA (Mar. 6, 2015); Letter from Amy Farrell, Vice

President, Market Development, America’s Natural Gas Alliance,

to Howard Schneider, Esq., Chair, Board of Managers, PJM

Interconnection, LLC (Nov. 11,2014) http//anga.us/media/testimo

ny/D363FDOE-5056-9F69-D4A648C9F6086D00/files/Final%20PJM

%20Capacity%20Assurance%20Proposal%20111114.pdf.

4

electricity, and abundant domestic supplies of natural

gas are available to replace baseload generation from

other fossil fuels that emit higher levels of carbon and

criteria pollutants. Natural gas generators also have

the ability to rapidly increase and decrease electricity

production (i.e., fast ramping), which is needed to

balance intermittent energy production from renewable

generators such as solar and wind. Because Order 745

would unlawfully overcompensate reductions in retail

electricity consumption and would impede economically

efficient deployment of natural gas, ANGA, too, has a

strong interest in this Court affirming the D.C.

Circuit’s ruling rejecting Order 745 as arbitrary and

capricious.

SUMMARY OF ARGUMENT

The court below correctly held that, even if FERC

had statutory authority to issue Order 745, the Order

would “still fail because it was arbitrary and

capricious.” U.S.Pet.App.15a.

The Federal Power Act (“FPA”) requires that all

wholesale rates for electric service be just and

reasonable, and not unduly discriminatory or

preferential. 16 U.S.C. §§ 824e(a), 824d(b). Under the

Administrative Procedure Act (“APA”), FERC must

fully consider the evidence before it and must fully

engage contrary arguments. Order 745 fails to meet

these requirements.

I. Asan initial matter, Order 745 is arbitrary and

capricious precisely for the reason identified by the

D.C. Circuit: “FERC failed to properly consider—and

engage—-Commissioner Moeller’s reasonable (and

persuasive) arguments, reiterating the concerns of

5

Petitioners and other parties, that Order 745 will

result in unjust and discriminatory rates.” U.S.Pet.App.

l5da.

II. In addition, FERC’s order should also be rejected

as unlawful, arbitrary and capricious because it does

not justify the substantial adverse effects that Order

745 could have on the diversity of the country’s energy

supply portfolio to the detriment of reliability and the

environment. The proposed overpayment to retail

customers would have an adverse and varying impact

on all generators, including those who produc:

electricity via nuclear energy and natural gas. The

result would be a compensation scheme that, contrary

to the FPA’s requirements, is unjust, unreasonable,

and unduly discriminatory.

Focusing first on the nuclear case, premature

retirement of nuclear facilities has the potential to

compromise the diverse mix of supply resources that is

important to maintaining long-term reliability and

security while achieving environmental goals. There

are already serious defects in policies and practices

governing how electricity is priced and how generators

are compensated. These factors have already caused

the premature closures of some nuclear plants. If

Order 745 were implemented, its preferentially high

payments to retail customers for their reduced

electricity consumption would artificially suppress

prices paid to all conventional generators, further

exacerbating this situation for nuclear generators.

Premature nuclear plant retirements resulting from

the failure of markets to properly value nuclear power

have adverse, long-term implications not only for the

industry itself, but for the public at large. In

6

particular, such early nuclear plant closings

(1) eliminate carbon-free electricity that is needed if the

United States is to meet its environmental objectives,

(2) reduce the availability of a reliable power source

that is available around the clock with a guaranteed

on-site fuel supply, (3) compromise the fuel and

technology diversity that is the bedrock of a robust,

resilient and cost-effective electric supply system,

(4) eliminate high-quality nuclear power jobs, and

(5) adversely impact the nation’s tax base.

Similarly, the failure of the markets to value

natural gas generation fairly for the services it provides

depresses the amount of generation from natural gas

and, in turn, harms the natural gas industry. In

particular, suppression of prices reduces natural gas

generation that (1) provides emission reduction

benefits over other fossil fuel generation sources,

(2) provides reliable baseload power, (3) provides

flexibility and fast ramping to balance intermittent

resources and stabilize the grid, and (4) creates

demand for a domestically-produced fuel which

contributes to our nation’s gross domestic product,

creates high-paying jobs, and provides significant

federal, state and local tax revenues. The nation’s

abundant supplies of clean-burning natural gas cannot

be fully utilized in the absence of wholesale prices that

properly reflect fundamental market forces.

In promulgating Order 745, FERC failed to

acknowledge, explain, or justify these harms to the

nation’s current and varied generation sources,

including nuclear and natural gas. These failures

provide independent grounds for affirming the D.C.

7

Circuit’s conclusion that Order 745 is arbitrary and

capricious.

ARGUMENT

When it ordered that retail consumers be paid full

locational marginal price (“LMP”) for reductions to

their energy consumption, FERC violated the FPA and

acted arbitrarily and capriciously.

I. FERC’S FAILURE TO ENGAGE THE SERIOUS

OBJECTIONS TO ITS APPROACH RENDERS

ORDER 745 ARBITRARY AND CAPRICIOUS

The FPA requires FERC to set wholesale power

rates at levels that are just and reasonable, and

prohibits rates that are “unduly discriminatory or

preferential.” 16 U.S.C. §§ 824e(a), 824d(b). Rates that

are not consistent with these provisions are “unlawful.”

16 U.S.C. § 824d(b).

Because the “statutory requirement that rates be

‘just and reasonable” eludes “precise judicial

definition,” FERC’s ratemaking decisions have

traditionally received “great deference.” Morgan

Stanley Capital Grp. Inc. v. Public Util. Dist. No. 1,554

U.S. 527, 532 (2008). This deference, however, is not

without its limits. Under the APA, courts must reject

agency rulemaking whenever it is “arbitrary,

capricious, or otherwise not in accordance with law.” 5

U.S.C. § 706(2A). This standard requires FERC to

comply with the statutory requirements, and to

“examine the relevant data and articulate a

satisfactory explanation” for its rules. Motor Vehicle

Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto.

Ins. Co., 463 U.S. 29, 43 (1983). Before adopting its

preferential rate treatment for demand response

8

resources, FERC was thus obligated to fully “engage

the arguments raised before it,” NorAm Gas

Transmission Co. v. FERC, 148 F.3d 1158, 1165 (D.C.

Cir. 1998) (quoting K N Energy, Inc. v. FERC, 968 F.2d

1295, 1303 (D.C. Cir. 1992)), and to provide a reasoned

response to the salient objections to its approach,

including the points raised by its dissenting

commissioner. See Am. Gas Ass’n v. FERC, 593 F.3d

14, 19-20 (D.C. Cir. 2010).

The D.C. Circuit correctly concluded that FERC

failed to satisfy this fundamental obligation. In briefs

to this Court and in the agency proceedings below,

numerous parties and commenters explained why

payments in the wholesale market at the full LMP to

those who reduce consumption for that reduction would

overcompensate those customers and yield

economically inefficient results.‘ Unlike wholesale

generators, demand response resources would, under

Order 745, realize both full LMP plus their savings

from purchasing less energy at retail (referred to as

“G”). By contrast, generation resources, like nuclear

and gas-fired generation, would receive only LMP, and

yet would still be “incomparably saddled with

generation costs” that demand response resources

would never have to incur. U.S.Pet.App.16a.

* See EPSA Br.49-60; see also U.S.Pet.App.73a n.57 (citing

comments of: APPA; AEP; The Brattle Group; Calpine; ConEd;

Consumers Energy; CPG; Detroit Edison; Direct Energy;

Dominion; Duke Energy; Edison Mission; EEI; EPSA; Exelon;

FTC; GDF; NYISO on behalf ofthe ISO RTO Council; ICC; IPPNY;

Indicated New York TOs; IPA; ISO-NE; Midwest TDUs; Mirant;

Midwest ISO TOs; NEPGA; NYISO; ODEC; OMS; PJM; PJM

IMM; P3; Potomac Economics; PG&E; Ohio Commission; Robert

L. Borlick; Roy Shanker; and RRI Energy).

9

In his dissent, FERC Commissioner Moeller

recognized these concerns and concluded that paying

full LMP for reduced energy consumption would be

unduly preferential and would not result in just and

reasonable rates. U.S.Pet.App.156a, 172a. In setting

the wholesale power payments to these customers,

Commissioner Moeller explained that, to accomplish its

professed goals of balancing supply and demand, FERC

needed to factor in the savings realized by customers

on their retail bills (i.e., “G”) absent a specific showing

that a higher rate was justified under the FPA.

U.S.Pet.App.172a. Commissioner Moeller thus noted

that FERC should have adopted a demand response

rate referred to as LMP minus G (or “LMP-G”).

U.S.Pet.App.172a.

Notwithstanding the cogent analysis offered by

Commissioner Moeller and others,’ FERC chose to

require that retail customers be paid in the wholesale

market full LMP for their reduced consumption

without regard to the actual circumstances they or

conventional generators were facing at the time. FERC

acknowledged that this favorable rate treatment for

demand response was intended to lower clearing prices

in the wholesale market. See U.S.Pet.App.56a (Order

745 will result in an “overall benefit from the reduced

LMP”). However, while FERC explained its motivation

for paying a preferential rate to demand response, it

completely failed to engage Commissioner Moeller’s

dissenting views, and provided no explanation as to

° See U.S.Pet.App.156a-172a (Commissioner Moeller’s analysis);

JA80-180 (EPSA Comments); JA181-219 (William W. Hogan

analysis, “Implications for Consumers of [Order 745’s] Proposal to

Pay the LMP for All Demand Response”); see also supra n.4.

10

why paying retail customers the full LMP in the

wholesale market was consistent with its objective of

balancing supply and demand. See U.S.Pet.App. 15a.

For that reason alone, FERC acted unlawfully,

arbitrarily and capriciously, and the D.C. Circuit

correctly concluded that Order 745 should be vacated.

Il.ORDER 745 IS ALSO UNLAWFUL,

ARBITRARY AND CAPRICIOUS BECAUSE IT

FAILS TO JUSTIFY THE ADVERSE IMPACT

ITS PREFERENTIAL RATES WOULD HAVE

ON GENERATION RESOURCES,

PARTICULARLY THE NUCLEAR AND

NATURAL GAS INDUSTRIES

FERC’s failure to provide any meaningful response

to the serious objections to its approach, as reflected in

Commissioner Moeller’s dissent, in itself provides a

sufficient basis for vacating Order 745. There is,

however, also another reason why Order 745 should be

rejected: the Order fails to acknowledge and to justify

the adverse impact its unduly preferential wholesale

rates for retail demand response would have on our

nation’s diverse supply resources, including nuclear

power generation and gas-fired resources.°

* Those adverse impacts, which will occur as a result of Order 745

depressing wholesale market prices, see infra Part I1.A., were

brought to FERC’s attention preceding the issuance of Order 745,

and some of these impacts also were referenced by Commissioner

Moeller in his dissent. See, e.g., Demand Response Compensation

in Organized Wholesale Energy Markets, FERC Docket No. RM10-

17, comments of EEI 11-13 (May 13, 2010) (Order 745 would have

“dysfunctional impacts ... on long-term wholesale market prices

including the investment necessary to maintain existing

generation and build new power plants”); JA109-510 (comments of

11

ISO New England noting that depressed LMPs below efficient

market clearing levels, that would result from Order 745 would

reduce incentive to invest in generation resources); Demand

Response Compensation in Organized Wholesale Energy Markets,

FERC Docket No. RM10-17, comments of Am. Elec. Power Serv.

Corp. (May 13, 2010) (consumers will suffer in the long-term when

demand growth and plant retirements necessitate the entry of

additional generation); U.S.Pet.App.170a (dissenting

Commissioner Moeller stating “[t]he long-term costs of allowing

demand resources to receive preferential compensation will

manifest themselves in various ways ... at the wholesale level, the

corrosive effect of overcompensating demand resources over time

will come at the expense of other resources, particularly generation

resources that will have less to invest in maintaining existing

facilities and financing new facilities”). In Order 745, FERC

ignored these arguments entirely. See U.S.Pet.App.89a-104a.

Parties again raised this issue before FERC in requests for

rehearing. See, eg., JA1097 (FEXC “has not given due

consideration to the long-term effects of [Order 745]” and

“consumers may benefit from lower market energy prices in the

near-term, but will suffer in the long-term when demand growth

and plant retirements necessitate the entry of additional

generation”); Demand Response Compensation in Organized

Wholesale Energy Markets, FERC Docket No. RM10-17, Request

for Reh’g of Competitive Power Supplier Ass’ns 43 (Apr. 14, 2011)

(“{Bly suppressing LMPs below the efficient levels, [Order 745] will

distort investment incentives and harm reliability in the long-run

by encouraging existing supply to exit and discouraging new entry.

[FERC] did not even begin to respond to these arguments”

(footnote omitted)). Yet, in its Order on Rehearing, FERC

summarized these industry-wide concerns in one sentence and

briefly stated that it rejected the arguments because both demand

and generation resources would receive compensation at LMP and

because demand response resources would increase supply-side

resource competition. U.S.Pet.App.221la. This explanation does

not address the concerns raised.

12

A. Preferred Prices For Demand Response

Would Threaten the Diverse Supply

Portfolio by Depressing Market Clearing

Prices Paid To All Supply Resources

Under the FPA, all resources that furnish wholesale

power, including nuclear and gas-fired resources,

should receive “just and reasonable” wholesale rates

that fully value the services they provide. FERC has a

statutory obligation to set rates that “are neither ‘less

than compensatory to producers nor ‘excessive’ to

consumers.” The wholesale rates set by Order 745

would violate that requirement. By over-paying

demand response, Order 745 would artificially inflate

demand response in the market, which would

artificially suppress wholesale prices to the detriment

of conventional producers such as nuclear and natural-

gas fired generators.

Respondents fully describe in their brief to this

Court why requiring that demand response be paid in

full LMP is unlawful, arbitrary and capricious — it

abruptly departs from earlier FERC findings and does

not further FERC’s professed policy goals.° Amici

agree, and discuss below the practical implications on

their industries of overpaying demand response.

Generating resources will be impacted in two ways

from the unjust and unduly discriminatory price

suppression effects that results from discriminatory

over-compensation of demand response. First, the

" US.Pet.App.166a n.24 (citing Farmers Union Cent. Exch. v.

FERC, 734 F.2d 1486 (D.C. Cir. 1984)).

* EPSA Br.49-60.

13

wholesale energy prices will be reduced as a result of

paying retail customers at the preferential LMP rate,

rather than the lower, non-preferential LMP-G rate.°

As explained more fully in the dissent below” and in

Respondents’ brief to this Court,” if LMP is paid to a

retail customer for reducing consumption, one

megawatt (“MW”) of additional generated electricity

would be worth less to that retail customer than

reducing its consumption of electricity by one MW.

That lower consumption, in turn, would reduce LMPs

paid to electricity generators — whatever the means of

their power production — that are serving the

remaining load. To be clear, the price suppression of

concern to amici is the suppression that results from

arbitrarily inflated demand response as a result of the

preferentially high payments that Order 745 would

require. That inflated demand response would displace

® LMP, in simple terms, is the price required to purchase the next

increment of energy needed to maintain reliability. In the

competitive wholesale electricity market, the supply resources

with the lowest incremental costs are dispatched (i.e., turned on)

first, with progressively higher incremental cost resources that can

satisfy load at any particular location on the system being

dispatched as the load grows. A uniform price is paid to resources

that are dispatched in this merit order, with that purchase price

referred to as the “clearing price.” Under this least-price dispatch

process, clearing prices generally increase as load increases and

fall as load falls. By paying demand response resources a premium

to reduce load, Order 745 would assure that the resulting energy

clearing prices are also reduced.

°'U.S.Pet.App. 156a-172a.

" EPSA Br.50-54.

14

cost-effective supply resources, which otherwise would

and should have set the LMP

The second adverse impact on generating resources

would be in the wholesale capacity markets.

Centralized wholesale capacity markets are necessary

to help ensure that there are enough resources

available to keep the lights on during times of peak

demand with some resources held in reserve. The

capacity market seeks to accomplish this by providing

an additional stream of market revenues for energy

and other ancillary services that, together with other

wholesale market revenues, provide “an adequate

opportunity for all resources to recover both their

variable and fixed costs over time.” The capacity

market revenue stream should be sufficient to replace

the “missing money” resulting from energy prices that

fail to reflect the full value of services provided.

Centralized Capacity Market Design Elements, FERC Docket

No. AD13-7, FERC Staff Report 2, (Aug. 23, 2013),

http://www.ferc.gov/CalendarFiles/20130826142258-

Staff%20Paper.pdf. The need for revenues in addition to energy

revenues has been referred to as the “missing money” problem

because the energy market alone does not produce enough

revenues for a resource that is needed for reliability in order to

cover that resource’s variable and fixed costs over time. IHS

Energy, The Value of US Power Supply Diversity 28-29 (July 2014),

http://www.nei.org/Master-Document-Folder/Backgrounders. Repor

ts-And-Studies/IHS-Energy-Study-The-Value-of-US-Power-Supply-

Dive (follow “Download” hyperlink) (describing inter alia how the

missing money problem can threaten power generation diversity).

'’ See supra n.12; see also Joint Technical Conference on New York

Markets & Infrastructure, FERC Docket No. AD14-18, Written

Statement of Dr. David Patton, Market Monitoring Unit for the

New York Independent System Operator 3-4 (Nov. 5, 2014),

15

FERC recognized that the increase in demand response

resulting from paying LMP rather than LMP-G “would

tend to drive capacity prices down,” but failed to

explain why such an impact is justified.’* Any drop in

capacity revenues resulting from artificially inflated

demand response would compound the revenue

reduction from artificially depressed energy prices.

In short, if the rate structure set forth in Order 745

has the effect intended by FERC, the preferential rate

paid for demand response would artificially inflate

demand response and artificially suppress prices in the

wholesale energy and capacity markets below levels

that reflect sound market fundamentals. As a result,

the revenues received by nuclear power and natural

gas-fired generators in the wholesale power market

would be artificially depressed.

http://www.ferc.gov/CalendarFiles/20141119133149-

D%20Patton%20Written%20Statement_11-5-14 pdf; Technical

Conference on Centralized Capacity Markets in Regional

Transmission Organizations and Independent System Operators,

FERC Docket No. AD13-7, David B. Patton, Ph.D., President,

Potomac Economics, Resource Adequacy in the Wholesale

Electricity Markets: Principles and Lessons Learned (Sept. 25,

2013), http://www.ferc.gov/CalendarFiles/20130925092436-

Patton ,%20Potomac%20Economics. pdf.

“U_S.Pet.App.119an.167. Others argued that the premature exit

of otherwise cost-effective resources resulting from the energy

price suppression could result in higher capacity prices, a fact also

not addressed by the FERC. See, e.g., JA509.

16

B. Suppression Of Wholesale Market Clearing

Prices Could Have Serious Repercussions

For The Nuclear And Natural Gas

Industries

Both the nuclear and natural gas industries depend

on wholesale power prices that reflect fundamental

market forces. In the case of nuclear power,

suppressed wholesale market prices are threatening

continued operation of some of the plants and Order

745 would increase that threat. In the case of natural

gas, price suppression from Order 745 would impede

the ability to realize the full potential of this abundant,

domestic energy supply. The U.S. electricity supply

and delivery system is already challenged, particularly

during extreme weather. Nuclear and natural gas are

essential to meet those challenges. A wholesale power

market that artificially suppresses energy could have

long-term detrimental impacts on the generation fleet,

grid stability and reliability, and would harm

consumers and the public interest.

1. Current market prices, even without

suppression from demand response

subsidies, are already challenging the

viability of certain nuclear power

plants, and inappropriate suppression

of market prices will further compound

those challenges

Nuclear power depends on wholesale energy and

capacity revenues to cover its costs. Because of known

defects in market design, policies and practices, the

competitive markets do not provide adequate

compensation to generators. FERC is aware of these

defects and has held technical conferences over the

17

past eighteen months on capacity market design and

price formation in energy markets. These defects, by

themselves, are well-documented and already

compromise the viability of certain generating assets,

including certain nuclear plants, thereby reducing the

long-term reliability and diversity of the supply

portfolio."° Order 745 would make that bad situation

even worse, by further eroding the revenue stream to

generating plants and compromising the price signal

sent to generators. The benefits to the nation of

nuclear power are overwhelming and are threatened by

actions like Order 745 that would further distort the

power market and compound the challenges facing

nuclear power plants.

As to the benefits of nuclear power, U.S. nuclear

power plants generate approximately 20 percent of the

nation’s electricity, at power plants that operate safely,

'® See, e.g., Technical Conference on Centralized Capacity Markets

in Regional Transmission Organizations and Independent System

Operators, FERC Docket No. AD13-7 (Sept. 25, 2013); Price

Formation in Energy and Ancillary Services Markets Operated by

Regional Transmission Organizations and Independent System

Operators, FERC Docket No. AD14-14.

‘© See Technical Conference on Centralized Capacity Markets in

Regional Transmission Organizations and Independent System

Operators, FERC Docket No. AD13-7 (Sept. 25, 2013); Price

Formation in Energy and Ancillary Services Markets Operated by

Regional Transmission Organizations and Independent System

Operators, FERC Docket No. AD14-14; IHS Energy, The Value of

US Power Supply Diversity 28-29 (July 2014),

http://www.nei.org/Master-Document-Folder/Backgrounders/Rep

orts-And-Studies/IHS-Energy-Study-The-Value-of-US-Power-

Supply-Dive (follow “Download” hyperlink).

18

reliably, and around the clock,’ 18 to 24 months at a

time between refueling, with annual capacity factors

that routinely exceed 90 percent." Nuclear power

plants have fuel on-site and are available to run when

needed. For example, while the frigid temperatures

produced by the 2013/2014 Polar Vortex created a high

demand and impacted the production of electricity from

all generation sources, as found by the North American

Electric Reliability Corporation, which is responsible

for assuring the reliability of the entire electric grid,

' This is also an important distinction between generation

resources, like nuclear power plants, and demand response —

nuclear power plants generally can produce energy whenever they

are needed, whereas demand response providers typically can only

be called upon to reduce load a limited number of times and for

short durations.

* See FERC Examination of the Environmental Protection

Agency’s Clean Power Plan, FERC Docket No. AD 15-4, comments

of NEI 2, 4 (Feb. 23, 2015) (nuclear power plants “provide

approximately 20 percent of America’s electricity, and 63 percent

of America’s carbon-free electricity”). A plant’s capacity factor

during a period of time, in simple terms, is the ratio of a power

plant’s actual production to its potential production if it operated

at its full rating over the same time. Other forms of power, such as

solar and wind, have capacity factors that are half or less than

nuclear’s capacity factor. See U.S. Energy Information

Administration, Electric Power Monthly, Table 6.7.B. Capacity

Factors for Utility Scale Generators Not Primarily Using Fossil

Fuels, January 2013-J une 2015, http://www .eia.gov/electricity/mon

thly/epm_table grapher.cfm?t=epmt_6_07_b (last visited Sept. 3,

2015).

19

“the polar vortex had the least impact on nuclear

plants.””

Nuclear power plants also provide more than 60

percent of the nation’s carbon-free electricity — three

times more carbon-free electricity than hydropower,

and five times more than wind energy.” Without

nuclear plants operating in 30 states, carbon emissions

from the U.S. electric sector would be 25 percent higher

than they are currently.”’

Current low wholesale prices that do not reflect

these highly favorable nuclear attributes have already

led to the premature closure of several nuclear power

facilities in the past several years, including facilities

‘* North American Electric Reliability Corporation, Polar Vortex

Review 13, App. A at 32 (Sept. 2014), http://www.nerc.com/pa/rrm

/January%202014%20Polar%20V ortex%20Review/Polar_Vortex_

Review_29 Sept_2014 Final.pdf (of the three major fuel types,

“the polar vortex had the least impact on nuclear plants.”); see also

Midcontinent Independent System Operator, Inc., 2013-2014

MISO Cold Weather Operations Report 24 (Nov. 2014),

https://www.misoenergy.org/Library/Repository/Report/Seasonal

%20Market%20Assessments/20 13-20 14%20Cold%20 Weather %20

Operations%20Report. pdf (during the polar vortex, “the outage

rate for nuclear units was only 8% and provided the reliability

when the system needs them the most”).

*” FERC Examination of the Environmental Protection Agency’s

Clean Power Plan, FERC Docket No. AD15-4, comments of NEI 4

(Feb. 23, 2015).

" Id.

20

in Wisconsin and Vermont.” Premature closure of

other facilities may soon follow.”

Additional premature closures of nuclear plants

would have serious negative consequences. Viable and

sustainable nuclear generation is essential to meet

goals of carbon abatement and energy diversity.” If

nuclear plants close, renewable generation will be

available to replace some of the lost megawatts, but not

” FERC Examination of the Environmental Protection Agency’s

Clean Power Plan, FERC Docket No. AD15-4, comments of NEI

(Feb. 23, 2015); Nuclear Matters, Fact Sheet on Challenges Facing

Nuclear Energy Plants (June 2014), http://www.nuclearmatters.

com/resources/fact-sheets/document/7-Nuclear-Matters-

Challenges-Facing-Nuclear-Energy-Plants. pdf.

3 See supra note 22; Thomas Overton, U.S. Faces Wave of

Premature Nuclear Retirements, Power (Jan. 14, 2015),

http://www. powermag.com/u-s-faces-wave-of-premature-nuclear-

retirements/. Efforts to recover missing revenues in the capacity

market in the mid-Atlantic region, at least for three nuclear power

generators owned by an NEI member, were unsuccessful when

those generators were not selected in the auction as capacity

resources for the region. Thomas Overton, Three of Exelon’s Nuke

Plants Fail to Clear PJM Auction Despite Jump in Payments,

Power (Aug. 24, 2015), http://www. powermag.com/three-of-exelons-

nuke-plants-fail-to-clear-pjm-auction-despite-jump-in-payments.

* See Samuel Brinton and Josh Freed, When Nuclear Ends: How

Nuclear Retirements Might Undermine Clean Power Plan Progress

(Aug. 21, 2015), http//www.nuclearmatters.com/resources/reports-

studies/document/when-nuclear-ends-how-nuclear-retirements-

might-undermine-clean-power-plan-progress.pdf, [HS Energy, The

Value of US Power Supply Diversity 28 (July 2014),

http://www.nei.org/Master-Document-Folder/Backgrounders/Rep

orts-And-Studies/IHS-Energy-Study-The-Value-of-US-Power-

Supply-Dive (follow “Download” hyperlink).

21

in the same way, as they simply do not generate

electricity around the clock. As a result, other fuel

technologies, including technologies with significant

carbon emissions, would likely be used, contrary to any

carbon abatement goal.”

If the additional harm to clearing prices that results

from preferential payments to demand response causes

additional high-capacity and well-functioning nuclear

plants to close prematurely, diversity of this nation’s

fuel and technology portfolio will be threatened. The

deleterious impact that would occasion such premature

nuclear power plant closures should not be

underestimated. Cost-effective power supply will be at

risk “because when the market-clearing prices are

chronically too low to support new power plants, then

lower expected cash flows at existing plants cause

retirements before it is economic to do so given costs.””

The current diverse U.S. power supply reduces U.S.

consumer power bills by over $93 billion compared to a

*° See Samuel Brinton and Josh Freed, When Nuclear Ends: How

Nuclear Retirements Might Undermine Clean Power Plan Progress

5 (Aug. 21, 2015), http//www.nuclearmatters.com/resources/repor

ts -studies/document/when-nuclear-ends-how-nuclear-retirements-

might-undermine-clean-power-plan-progress. pdf (if more nuclear

reactors shut down, in any scenario, “U.S. emissions would go up

dramatically even under compliance with existing renewable

portfolio standards”) (emphasis in original).

* IHS Energy, The Value of US Power Supply Diversity 29 (July

2014), http://www.nei.org/Master-Document-

Folder/Backgrounders/Reports-And-Studies/IHS.Energy-Study-

The-Value-of-US-Power-Supply-Dive (‘follow “Download”

hyperlink).

22

less diverse supply.”’ Simply stated, the loss of some or

several nuclear power plants would lead to a less

diverse power supply and, in turn, would likely result

in power prices being higher and more volatile, all of

which would force a costly adjustment process for this

nation’s consumers and businesses.

Finally, nuclear plant closures would result in the

loss of many high-quality, high-paying jobs and would

adversely impact the nation’s tax base.” Federal and

state tax revenues from the U.S. nuclear industry are

currently estimated to reach an annual average of

$12.1 billion in years 2015 through 2024.” If nuclear

plants retire prematurely, these revenues will certainly

shrink.

The price suppression effects of Order 745 would

only compound the market challenges that the nuclear

industry is currently facing. Premature nuclear plant

closures and the attendant serious problems associated

with the loss of that generation can be avoided if

wholesale power prices properly reflect market

fundamentals. As a result, if demand response is

permitted to participate in the wholesale power

markets, the rate paid for such resources should reflect

market fundamentals and avoid the adverse effects

7 Id. 5, 9, 34.

** See Mark Berkman & Dean Murphy, The Brattle Group, The

Nuclear Industry’s Contribution to the U.S. Economy (July 7,

2015), http://www.nuclearmatters.com/resources/reports-

studies/document/N uclear-Matters-Report_Val]ue-of-Nuclear pdf.

™ Id. 12.

23

that preferential rates for demand response resources

will have on generation resources.

2. Improperly suppressed market prices

could limit the efficient deployment of

natural gas generation and the

development of new natural gas

generation facilities

The adverse impacts of improperly suppressed

wholesale market prices are by no means limited to the

nuclear industry. Our country is blessed with

abundant, clean, affordable domestic supplies of

natural gas.” Yet, the optimal deployment of these

resources in the power sector depends, like nuclear

power, on wholesale market prices that properly value

the services they provide.

As with nuclear power, certain types of natural gas-

fired generation have the potential to provide around-

the-clock, reliable baseload power to the electric grid.

The emissions from these plants are considerably lower

* See American Gas Association, Identifying Key Economic

Impacts of Recent Increases in U.S. Natural Gas Production (May

22, 2012), https://www aga org/identifying-key-economic-impacts-

recent-increases-us-natural-gas-production-may-22-20node2

(follow “EA 2012-03 Economic Impact of Increase Gas Suppliers

May 2012.pdf” hyperlink); U.S. Energy Information

Administration, How much carbon dioxide is produced when

different fuels are burned?, http://www.eia.gov/tools/faqs/faq.cfm?

id=73&t=11 (natural gas produces much lower carbon dioxide

emissions than other forms of fuel, including coal, oil, and diesel)

(last updated June 18, 2015); American Gas Association, Natural

Gas is the Cleanest and Most Efficient Fossil Fuel,

https://www.aga.org/climate-change-and-environmental-analysis

(last visited Sept. 3, 2015).

24

than that of other fossil-fueled power generation like

coal, oil, and diesel.”

Other types of natural gas-fired generation have the

flexibility to start and stop quickly, thereby providing

intermediate and peaking services to the electric power

grid.” With continuing growth expected in

intermittent renewable power such as wind and solar,

gas-fired resources that can be flexibly dispatched are

essential.** Gas-fired generation is the key resource

available that is relied on to fill the gap when

generation from renewable power is unavailable

*' See U.S. Energy Information Administration, How much carbon

dioxide is produced when different fuels are burned?,

http://www.eia.gov/tools/faqs/faq.cfm?id=73&t=11 (natural gas

produces much lower carbon dioxide emissions than other forms of

fuel, including coal, oil, and diesel) (last updated June 18, 2015);

American Gas Association, Natural Gas is the Cleanest and Most

Efficient Fossil Fuel, https://www.aga.org/climate-change-and-

environmental-analysis (“natural gas is the cleanest and most

efficient fossil fuel”) (last visited Sept. 3, 2015).

” The highest incremental cost generating units are called upon by

system operators to run only during times of peak load and are

referred to as peaking units. As the name implies, intermediate

units are those that operate frequently but only as the load to be

served rises to intermediate levels.

* See John Miller, Why Expanded Alternative Energy Increases the

Need for Natural Gas (Jan. 29, 2013), http://www.theenergycolle

ctive.com/jemillerep/178096/expanded-wind-and-solar-power-

increase-need-natural-gas; American Gas Association, Natural

Gas: Rewriting Our Energy Future 4, https://www.aga.org/natural-

gas-rewriting-our-energy-future (follow “Natural Gas: Rewriting

Our Energy Future” hyperlink) (“natural gas electricity is widely

recognized as a reliable back-up to other renewable sources of

energy when the wind does not blow and the sun does not shine”).

25

because the sun is not shining or the wind is not

blowing.**

The substantial advantages of natural gas in the

wholesale power market will not be fully realized if

wholesale power prices fail to reflect market

fundamentals. The suppression of wholesale energy

prices that would result from paying preferential rates

to demand response under Order 745 would thus

artificially deter the deployment of new gas-fired

generation.”

When FERC enacted Order 745, it failed to

acknowledge these adverse impacts of providing unduly

and unreasonably preferential pricing for demand

response.” As a result, leaving aside the question of

whether FERC had the statutory authority to

* See supra note 33.

* Suppressed rates may also deter investment in infrastructure

improvements for more L.NG and gas transportation that will help

ensure natural gas is available when and where it is needed to

op*rate gas-fired plants See MIT Energy Initiative Analysis,

Report from Growing Concerns, Possible Solutions: The

Interdependency of Natural Gas and Electricity Systems 17 (Apr.

16, 2013), http://mitei.mit.edu/system/files/20 14-MITEI-Report-

Growing-Concerns-Possible-Solutions.pdf (“Additional pipelines

are needed to move gas from new supply centers to traditional

demand centers to meet growing demand in the power sector,” and

lack of adequate infrastructure will lead to “diminishing the

economic value of new natural gas reserves.”); MIT Energy

Institute, Press Release, Grid Reliability and the Role of Natural

Gas (May 6, 2014), http://mitei.mit.edu/news/grid-reliability-and-

role-natural-gas.

*° See supra note 6.

26

compensate retail customers for their reduced

consumption of electricity, FERC’s failure to

acknowledge and justify Order 745, including taking

into account its adverse impact on nuclear and gas-

fired generation resources, independently renders the

Order unlawful, arbitrary and capricious.

27

CONCLUSION

If this Court reaches the second question presented,

it should hold that Order 745 was unlawful, arbitrary

and capricious, and the Court should affirm the D.C.

Circuit’s judgment on that issue.

Respectfully submitted,

ELLEN C. GINSBERG DAVID T. Door

NUCLEAR ENERGY ERICK M. SANDLER*

INSTITUTE JOHN W. CERRETA

1201 F St., NW JENNIFER E. GALIETTE

Suite 1100 DAY PITNEY LLP

Washington, DC 20004 242 Trumbull Street

(202) 739-8000 Hartford, CT 06103-1212

(860) 275-0100

emsandler@daypitney.com

JOSEPH H. FAGAN

DAY PITNEY LLP

1100 New York Ave., NW

Suite 300

Washington, DC 20005

* Counsel of Record

Counsel for Amici Curiae

September 8, 2015