UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


CT VALLEY ELEC CO

v.

FERC


98-1294a

D.C. Cir. 2000


*	*	*


Ginsburg, Circuit Judge: Connecticut Valley Electric Com- pany, a local
distribution company serving some 10,000 cus- tomers in New Hampshire
and Vermont, petitions for review  of two orders of the Federal Energy
Regulatory Commission  denying Connecticut Valley any relief against a
power pro- ducing facility that violated s 3(17)(C)(ii) of the Federal
Pow- er Act (FPA). Connecticut Valley claims the Commission's  orders
violate s 210 of the Public Utility Regulatory Policies  Act of 1978
(PURPA), and that the Commission is required  by s 3(17)(C)(ii) of the
FPA to revoke the facility's status as a  "Qualifying Facility" (QF),
or alternatively that the Commis- sion's refusal to revoke the
facility's QF status or to provide  any other relief is an abuse of
the agency's remedial discre- tion.


We hold that we are without jurisdiction to address Con- necticut
Valley's claim arising under s 210 of the PURPA.  We reject
Connecticut Valley's claim that s 3(17)(C)(ii) of the  FPA requires
the Commission to revoke the facility's QF  status, and we conclude
that the Commission's decision to  deny any relief was a valid
exercise of its remedial discretion.  We therefore deny the petition


I. Background


The Congress enacted Title II of the PURPA, Pub. L. No.  95-617, 92
Stat. 3117, 3134 (1978), in an effort to encourage  the development of
cogeneration and small power production  facilities. A "cogeneration
facility" produces both electric 


energy and steam or some other form of usable energy, 16  U.S.C. s
796(18)(A); a "small power production facility" pro- duces less than
80 megawatts of electricity using biomass,  waste, renewable
resources, or geothermal resources as the  primary energy source, id.
s 796(17)(A). The Supreme Court  described s 210 of the PURPA in FERC
v. Mississippi, 456  U.S. 742, 750-51 (1982) (citations omitted):


... [Congress] felt that two problems impeded the  development of
nontraditional generating facilities: (1)  traditional electricity
utilities were reluctant to purchase  power from, and to sell power
to, the nontraditional  facilities, and (2) the regulation of these
alternative ener- gy sources by state and federal utility authorities
im- posed financial burdens upon the nontraditional facilities  and
thus discouraged their development.


In order to overcome the first of these perceived  problems, s 210(a)
directs FERC ... to promulgate ...  rules requiring utilities to offer
to sell electricity to, and  purchase electricity from, qualifying
cogeneration and  small power production facilities....


To solve the second problem perceived by Congress,  s 210(e), 16 U.S.C.
s 824a-3(e), directs FERC to pre- scribe rules exempting the favored
cogeneration and  small power facilities from certain state and
federal laws  governing electricity utilities.


In order to secure these benefits to qualifying cogeneration  and small
power production facilities--so-called Qualifying  Facilities, or
QFs--the Commission has promulgated the  following regulations,
respectively: 18 C.F.R. ss 292.303-305,  which require an electric
utility to sell to a QF electricity for  use in its operations at
regulated tariff rates and to buy the  QF's output at the utility's
"avoided cost";* and 18 C.F.R. 




__________

n * PURPA s 210(b), 16 U.S.C. s 824a-3(b), caps the total amount  a
utility may be required to pay for purchases from a QF at 
"incremental cost," also called "full avoided cost," American Paper 
Inst., Inc. v. American Elec. Power Serv. Corp., 461 U.S. 402, 404 
(1983), which is defined as "the cost to the electric utility of the 
electric energy which, but for the purchase from such cogenerator 


ss 292.601-602, which exempt a QF from the Public Utility  Holding
Company Act of 1935, 15 U.S.C. s 79 et seq., most  state regulation as
a public utility, and much of the FPA. A  small power producer (SPP)
is a QF only if it (1) meets  various Commission requirements
respecting fuel use, fuel  efficiency, and reliability, 16 U.S.C. s
796(17)(C)(i) and (2) "is  ... not primarily engaged in the generation
or sale of electric  power (other than electric power solely from
cogeneration  facilities or small power production facilities)," id. 
s 796(17)(C)(ii).


A. Regulatory Background: Gross Versus Net Output


There are two ways of measuring the power production  capacity of a QF:
one looks to gross output, which is all  electricity produced by the
facility, the other to net output,  which is gross output less the
electricity used in the QF's own  operations. The distinction is
important because many QFs  purchase their internal operating needs at
tariffed rates from  the electric utility to which they sell their
output, which the  utility is required to buy at the utility's full
avoided cost. If  the QF were allowed to sell its gross output to the
electric  utility at full avoided cost, then it would in effect be
selling  back at a significant markup the quantum of electricity it 
purchased from the utility for its internal operating needs.


In 1991, the Commission for the first time addressed  whether a
facility that sold its gross output would lose its 




__________

n or small power producer, such utility would generate or purchase 
from another source," s 210(d), 16 U.S.C. s 824a-3(d). In promul-
gating regulations to implement s 210, the Commission adopted  this
statutory cap as the amount a utility would be required to pay  for
all purchases from a QF. See 18 C.F.R. s 292.304(b)(2). In  other
words, the Commission set the rate at the maximum level.  The Supreme
Court approved in American Paper, 461 U.S. at 417.


Calculation of the full avoided cost rate is complicated. See 18 
C.F.R. s 292.304(e). For purposes of this petition the important 
point is that the rate that a QF can require a utility to pay is
almost  always higher than the regulated tariff rate at which the QF
can  purchase from the utility electricity for its internal operating


status as a QF because it would no longer be, as required by  s
3(17)(C)(ii),* "not primarily engaged in the generation or  sale of
electric power (other than electric power solely from  cogeneration
facilities or small power production facilities)."  Turners Falls Ltd.
Partnership, 55 FERC p 61,487. The  Commission began by recognizing
that s 3(17)(C)(ii) is ambig- uous: If a utility provides a QF with
power for its operations  through one line, and the QF provides its
gross output back  to the utility through a separate line, then in one
sense  (namely, the physical) the QF is selling only electricity
"solely  from cogeneration or small power production facilities" and 
the requirement of s 3(17)(C)(ii) is satisfied; in another  (namely,
the economic) sense, however, the QF is selling back  to the utility
electricity that was generated by the utility, in  violation of that
section. See id. at 62,668.


In light of this ambiguity and the broad discretion the  Congress
granted the Commission in s 3 of the FPA to  determine the
requirements for QF certification, the Commis- sion concluded that it
could lawfully interpret the statute  either to allow or to preclude a
QF's sale of its gross output.  See id. at 62,669. In the end,
however, the Commission  decided that the policies of the PURPA are
served better if  the statute is read to say that a facility that
sells its gross  output is not a QF. See id. at 62,671.


B. Procedural Background: Petition to Revoke Clare- mont's QF Status


Wheelabrator Claremont Company (hereinafter Claremont)  operates an SPP
facility in Claremont, NH. In 1983 the New  Hampshire Public Utilities
Commission approved a settle- ment agreement among Connecticut Valley,
Claremont  (through its predecessor in interest), and the NHPUC's own





__________

n * Turners Falls actually addressed a cogenerator's status as a  QF
pursuant to s 3(18)(B)(ii). Section 3(17)(C)(ii), which applies to 
SPPs, and s 3(18)(B)(ii), which applies to cogenerators, are identi-
cal; the parties agree that the Commission's interpretation of  s
3(18)(B)(ii) in Turners Falls applies to both provisions. For the 
sake of consistency, therefore, we refer to s 3(17)(C)(ii) throughout 
this opinion.


staff. See In re New Hampshire/Vermont Solid Waste Pro- ject, DR
82-343, Order No. 16,232, 68 NHPUC 96. The  settlement, as embodied in
a contract executed between Con- necticut Valley and Claremont and
approved by the NHPUC  in 1984, provided that Connecticut Valley would
purchase the  "entire electrical output" of Claremont's proposed SPP
facili- ty for 20 years at Connecticut Valley's full avoided cost (of 
nine cents per kWh, adjusted for inflation) while simulta- neously
providing Claremont with its needs for electricity in  its operations,
at Connecticut Valley's consolidated tariff rate,  which has proven to
be less than the adjusted contract rate.  Claremont applied to the
Commission for QF certification,  representing that its output would
be 4.5 MW but it did not  specify whether that was its gross or net
output. The  Commission certified the Claremont facility as a QF in
1986,  and in 1987 Claremont began selling to Connecticut Valley its 
gross electrical output of 4.5 MW.


In 1993 Claremont, in response to an inquiry from the  NHPUC, reported
that its gross output was 4.5 and its net  output 3.9 MW. Connecticut
Valley then asked the NHPUC  to investigate whether Claremont
qualified as a QF in view of  its having sold its gross output.
Instead, the NHPUC, noting  that the FERC has exclusive jurisdiction
over the decertifica- tion of a QF, ordered Connecticut Valley to
petition the  Commission for revocation of Claremont's QF status. See
In  re Connecticut Valley, DR 93-196, Order No. 21,000  (NHPUC Oct.


Connecticut Valley duly filed a complaint with the Commis- sion seeking
revocation of Claremont's QF status based upon  Claremont's sales of
gross output and its alleged misrepre- sentations to the Commission in
applying for QF status.  Connecticut Valley further requested that,
once Claremont's  QF status was revoked, the Commission take
jurisdiction over  Connecticut Valley's contract with Claremont
pursuant to  ss 205-206 of the FPA and either rescind the contract and
 retroactively determine just and reasonable rates for past  sales, or
at least prospectively reform the contract so that  Connecticut Valley
need purchase only Claremont's net out- put.


Although the Commission agreed with Connecticut Valley  that Claremont
could not be a QF because its gross sales took  it outside the rule of
s 3(17)(C)(ii), the Commission denied  Connecticut Valley any relief.
See Connecticut Valley Elec.  Co. v. Wheelabrator Claremont Co., 82
FERC p 61,116, at  61,422 (1998). The Commission explained that the
statute is  ambiguous and could be read to allow gross sales by a QF. 
Not until Turners Falls, the Commission concluded, had it  made clear
that gross sales would violate s 3(17)(C)(ii) and  thus preclude QF
status. See id. at 61,418. Noting, however,  that many QFs had in good
faith entered into long-term  contracts for the sale of their gross
output, and not wanting  to upset their settled expectations, the
Commission adopted a  remedial policy that was only partially
retroactive: "We will  ... revoke the QF status of any facility which
sells in excess  of its net output pursuant to a contract entered into
after the  date of issuance of Turners Falls." Id. at 61,420. Because 
the Claremont contract predated Turners Falls, the Commis- sion
declined to revoke Claremont's QF status or to take any  other
remedial action. See id. at 61,422.


Connecticut Valley petitioned for rehearing, arguing that  s
3(17)(C)(ii) is not ambiguous and therefore the Commission  should
have decertified Claremont or provided Connecticut  Valley some
alternative relief for Claremont's acknowledged  violation of the
statute. The Commission denied rehearing,  83 FERC p 61,136 (1998),
and Connecticut Valley petitioned  this court for review of both


II. Analysis


Connecticut Valley and the Commission agree that under  s 3(17)(C)(ii)
of the FPA an SPP that sells more than its net  output, as Claremont
does, cannot be a QF. The Commission  maintains that it may
nonetheless refuse to revoke Clare- mont's QF status and may deny
Connecticut Valley any  alternative relief. Connecticut Valley claims
that the Com- mission's refusal to revoke Claremont's QF status or to 
provide some alternative relief violates s 210 of the PURPA 


and s 3(17)(C)(ii) of the FPA, and is an abuse of the Commis- sion's
remedial discretion.


A. Section 210 of the PURPA


Connecticut Valley claims that under the challenged orders  it is
required to pay Claremont more for electricity than the  lawful
maximum established by s 210 of the PURPA, that is,  its full avoided
cost. The matter is less than straightforward  because s 210 actually
caps the total amount (not just the per  unit rate) a utility is
required to pay a QF for electricity: the  utility can be required to
pay no more than "the cost to the  electric utility of the electric
energy which, but for the  purchase from such cogenerator or small
power producer,  such utility would generate or purchase from another
source."  16 U.S.C. s 824a-3(d). Connecticut Valley claims its
contract  with Claremont requires it to purchase Claremont's gross 
output, whereas but for the purchase from Claremont, Con- necticut
Valley would need to generate or purchase electricity  equal only to
Claremont's net output. Thus the Commission's  refusal to revoke
Claremont's QF status and reform the  contract requires Connecticut
Valley to pay more than its full  avoided cost.


Although neither party raised this issue in their briefs, we  asked the
parties to address at oral argument whether we  have jurisdiction to
adjudicate in the first instance a dispute  arising under s 210. See
New York State Electric & Gas  Corp. v. FERC, 117 F.3d 1473, 1477
(D.C. Cir. 1997); Niaga- ra Mohawk Power Corp. v. FERC, 117 F.3d 1485,
1489 (D.C.  Cir. 1997). The Commission takes the position that we do 
not. Connecticut Valley replies with a variety of arguments,  none of
which is responsive to the Commission's jurisdictional  argument.


We agree with the Commission that New York State Elec- tric and Niagara
Mohawk control this case. Section 210 sets  up an elaborate
enforcement scheme in which the roles of the  Commission, the state
public utility commissions (PUCs), and  the federal courts are
specifically delineated. Under  s 210(a), the Commission is required
to promulgate regula- tions governing utilities' purchases of


including regulations implementing the statutory cap under  ss
210(b)-(d). 16 U.S.C. ss 824a-3(a), (b), (d). The state  PUCs are then
required (by s 210(f), 16 U.S.C. s 824a-3(f))  to implement the
Commission's regulations. If a PUC fails to  implement the
regulations, the Commission may bring an  enforcement action against
that PUC in federal district court.  Alternatively, if a private party
petitions the Commission to  initiate an enforcement action against a
PUC and the Com- mission declines, then that party may itself sue the
PUC in  federal district court to force implementation of the regula-
tions. See s 210(h)(2), 16 U.S.C. s 824a-3(h)(2); see also  New York
State Electric, 117 F.3d at 1476.


Thus, when Connecticut Valley says that s 210 "requires  FERC to cap QF
rates at full avoided cost," it is correct only  in the limited sense
that the Commission is required to  promulgate regulations to that
effect. The Commission satis- fied that obligation when it promulgated
18 C.F.R.  s 292.304(a)(2), which limits the cost at which a utility
pur- chases power from an SPP at an amount equal to the utility's 
full avoided cost. The Commission's only obligations under  s 210 are
the promulgation and periodic revision of these  regulations and of
the exemption regulations required by  s 210(e); therefore, the
Commission's decision not to take  any action in response to
Claremont's apparent violation of  s 3(17)(C)(ii) cannot be a
violation of s 210 by the Commis- sion. The Commission has in effect
merely "announced the  position ... it would take in any future
enforcement action  that [Connecticut Valley] might bring," New York
State Elec- tric, 117 F.3d at 1476, namely, that it will not seek to
remedy  violations of s 210 arising from Claremont's sale of gross 
output under a contract entered into prior to the Commis- sion's


Connecticut Valley may have a valid claim that the  NHPUC has violated
s 210 by approving a contract that  requires Connecticut Valley to
purchase gross output and  therefore to pay more than the utility's
full avoided cost. As  we have said before, "[t]he failure of a state
commission to  ensure that a rate does not exceed a utility's avoided
cost is a  failure to comply with a [Commission] regulation


ing the PURPA," which "would ordinarily be challenged  through an
enforcement action brought in district court under  s 210(h)." Id.
Based upon the Commission's position as  stated in the orders under
review, that agency would presum- ably decline to bring an enforcement
action if Connecticut  Valley petitioned it to do so; and its
declination would clear  the way for Connecticut Valley to bring its
own enforcement  action in district court.


If this court, in the guise of reviewing the Commission's  present
no-action position, were to address the question  whether the
petitioner's contract with Claremont violates  s 210, then we would
"usurp the role of the district court as  the court of first instance,
contrary to the enforcement  scheme adopted by the Congress in s
210(h) of the PURPA."  Industrial Cogenerators v. FERC, 47 F.3d 1231,
1235 (D.C.  Cir. 1995). Therefore, we conclude we are without
jurisdic- tion to address Connecticut Valley's claim arising under  s
210. See id. at 1236; New York State Electric, 117 F.3d at  1477;
Niagara Mohawk, 117 F.3d at 1489.


B. Section 3(17)(C)(ii) of the FPA


Connecticut Valley next challenges the Commission's deci- sion to
grandfather contracts entered into prior to its decision  in Turners
Falls and therefore not to revoke Claremont's QF  status. Connecticut
Valley claims that in view of the clear  congressional decision in FPA
s 3(17)(C)(ii) that an SPP  selling more than its net output is not
within the definition of  a QF, "the Commission lack[s] the discretion
to grandfather  any QF contracts requiring utilities to purchase a
QF's gross  output."


In order to establish that the Commission has no remedial  discretion,
Connecticut Valley must demonstrate not only that  Claremont's sale of
gross output violates s 3(17)(C)(ii), but  also that the Commission is
required to apply the revocation  rule of Turners Falls to contracts
predating that decision.  The first point is moot, for the Commission
agrees that  Claremont is in violation of the statute. The second
point is  the difficult one for Connecticut Valley because "the
breadth  of agency discretion is, if anything, at [its] zenith when


action assailed relates primarily not to the issue of ascertain- ing
whether conduct violates the statute, or regulations, but  rather to
the fashioning of policies, remedies and sanctions."  Niagara Mohawk
Serv. Corp. v. FPC, 379 F.2d 153, 159 (D.C.  Cir. 1967); Louisiana
Public Power Comm'n v. FERC, 174  F.3d 218, 225 (D.C. Cir. 1999). In
other words, the Commis- sion ordinarily has remedial discretion, even
in the face of an  undoubted statutory violation, unless the statute
itself man- dates a particular remedy. See, e.g., Towns of Concord, 
Norwood, & Wellesley v. FERC, 955 F.2d 67, 72-73, 76 n.8  (D.C. Cir.


Section 3(17)(C)(ii) does not expressly specify a particular  remedy
for the violation of its terms. Compare National  Insulation Transp.
Comm. v. ICC, 683 F.2d 533, 537-38 (D.C.  Cir. 1982) (ICC would lack
remedial discretion for certain  rate violations because 49 U.S.C. s
10707(d)(1) (1982) ex- pressly mandates refund). Connecticut Valley
argues, none- theless, that s 3(17)(C)(ii) unambiguously defines the
require- ments for status as a QF, and the Commission must carry out 
this clear congressional command by denying QF status to  any facility
that does not fit the bill.


We reject this claim because, contrary to the petitioner's  premise, s
3(17)(C)(ii) is not unambiguous. As the Commis- sion first recognized
in Turners Falls, when electricity sales  between a QF and a utility
are analyzed from a physical  perspective, s 3(17)(C)(ii) can
reasonably be interpreted to  allow a QF to sell its gross output. See
Turners Falls, 55  FERC at 62,668. Based upon this ambiguity, the
Commis- sion, as the agency charged with administering the FPA, 
determined that it had discretion to interpret the statute as 
allowing or precluding the sale of gross output by a QF; it  then
determined that the interpretation more in keeping with  the purpose
of the Act prohibits such sales. Both interpreta- tions of s
3(17)(C)(ii) are self-evidently reasonable in the face  of this
ambiguity, and Connecticut Valley raises no legal  principle that
would require the Commission--despite the  severe impact upon both the
settled expectations of private  parties and the governmental interest
in encouraging the  development of nontraditional generating


retroactively the interpretation of s 3(17)(C)(ii) it ultimately 
adopted in Turners Falls. Cf. Clark-Cowlitz Joint Operating  Agency v.
FERC, 826 F.2d 1074, 1081 (D.C. Cir. 1987) (en  banc) (private and
governmental interests may overcome  "general principle [that agency]
may apply ... new interpre- tation" retroactively). In light of the
ambiguity of  s 3(17)(C)(ii) and the absence of a specific remedial
command  from the Congress, we conclude that the Commission retains 
remedial discretion to decide whether to revoke Claremont's  status as


C. Abuse of Remedial Discretion


Because we conclude that the Commission has discretion  with respect to
remedying Claremont's violation of  s 3(17)(C)(ii), Connecticut Valley
is remitted to challenging  the Commission's exercise of that
discretion, which we review  only for abuse. See Louisiana Public
Serv. Comm'n v.  FERC, 174 F.3d 218, 225 (D.C. Cir. 1999). An agency
abuses  its remedial discretion if its decision "conflicts with the
'core  purpose[]' " of the statute it administers, Towns of Concord, 
955 F.2d at 74 (quoting Maislin Indus., Inc. v. Primary  Steel, Inc.,
497 U.S. 116, 133 (1990)), or if it is not "otherwise  reasonable,"
that is, based upon a reasonable accommodation  of all the relevant
considerations and not inequitable under  the circumstances. Towns of
Concord, 955 F.2d at 75-76; see  also Koch Gateway Pipeline Co. v.
FERC, 136 F.3d 810 (D.C.  Cir. 1998); Laclede Gas Co. v. FERC, 997
F.2d 936 (D.C. Cir.  1993). Insofar as the Commission's remedial
decision is  based upon factual determinations, they must be supported
 by substantial evidence in the record. See 16 U.S.C.  s 825l(b);
Louisiana Public Serv. Comm'n, 174 F.3d at 225.


Connecticut Valley argues that the Commission's decision  not to revoke
Claremont's QF status or to provide any  alternative relief is an
abuse of discretion for a number of  reasons. First, Connecticut
Valley claims the decision direct- ly conflicts with all three
statutory purposes expressed in  s 101 of the PURPA, to wit,
"conservation of energy," "op- timization of [electric utility]
efficiency," and "equitable rates  to electric consumers." 16 U.S.C. s


As the Commission properly notes, however, s 101 applies  only to Title
I of the PURPA, whereas QF status is a  creature of Title II. And the
Supreme Court has said that  the core purpose of Title II is "to
encourage the development  of cogeneration and small power production
facilities" by  addressing "problems imped[ing] the development of
nontrad- itional generating facilities." FERC v. Mississippi, 456 U.S.
 at 750. In other words, Title II reflects, predominantly,  solicitude
for certain types of producers rather than for the  consumers who must
pay their rates. Accordingly, the Com- mission deemed it material in
the orders under review that  "many QFs ... have entered into
contracts which require[ ]  or permit[ ] the ... sale of gross
output." 82 FERC at  61,419. Revoking the QF status of those
facilities, or altering  their "obligations and responsibilities
under[ ] such executed  PURPA sales contracts," id. at 61,420, would
undercut the  purpose of the Congress in Title II to encourage the
develop- ment of these nontraditional generating facilities. We see no
 conflict, therefore, between the Commission's exercise of re- medial
discretion and the relevant statutory purpose.


Nor can we accept Connecticut Valley's second argument,  which is that
the Commission's failure even to consider harm  to consumers was an
abuse of discretion. According to  Connecticut Valley, s 210(b) of the
PURPA expressly re- quires the Commission to balance the interests of
consumers  against those of producers, thus:


The rules prescribed under subsection (a) of this section  shall insure
that, in requiring any electric utility to offer  to purchase electric
energy from any [QF], the rates for  such purchase ... shall be just
and reasonable to the  electric consumers of the electric utility and
in the public  interest....


16 U.S.C. s 824a-3(b). This requirement is directed, howev- er, at the
Commission's exercise of rulemaking authority over  the rates
utilities must pay QFs for power. The Supreme  Court has already held
that the full avoided cost rule satisfies  the requirements of s
210(b). See American Paper Inst., 461  U.S. at 415-17. Therefore the
Commission did not abuse its 


discretion when it omitted explicitly to consider anew the  interests
of consumers.


Third, Connecticut Valley claims the Commission failed  adequately to
consider whether Occidental Geothermal, Inc.,  17 FERC p 61,231
(1981), and Power Developers, Inc., 32  FERC p 61,101 (1985), put
Claremont on notice, before the  contract was executed (or at least
before Claremont filed its  application for certification as a QF),
that a QF may not sell  its gross output. The Commission did not fail
fully to consid- er those cases. On the contrary, the Commission
expressly  read both cases as having resolved issues related to but
not  the same as that resolved in Turners Falls: In Occidental 
Geothermal the Commission held that net output is the  appropriate
measure of the 80-MW limitation upon SPPs;  and in Power Developers it
concluded that "a QF may not sell  more than net output at avoided
cost rates." Connecticut  Valley, 82 FERC at 61,417-18. Although both
cases were, of  course, relevant to the Commission's understanding of
this  case, the Commission reasonably concluded that it was not  until
Turners Falls that it "removed any remaining ambiguity  about whether
the 'simultaneous buy-sell' rule permitted a  sale in excess of net
output [and] clearly stated that a sale in  excess of net output would
deprive a facility of its QF status."  Id. at 61,417; see also 83 FERC
p 61,136, at 61,610. There  was no abuse of discretion here.


Fourth, Connecticut Valley argues the Commission failed to  consider
whether Claremont intentionally or negligently mis- led the Commission
by stating its gross rather than its net  output in its application
for certification. The Commission  did not have to address this claim
in the orders under review,  however; it was rendered moot when the
Commission held  that it was reasonable for a facility applying for QF
certifica- tion prior to the Turners Falls decision to have believed
that  the Commission's "simultaneous buy-sell" rule allowed the QF  to
sell its gross output. See 82 FERC at 61,418. The  Commission noted
that many applicants--and indeed several  state PUCs--had thought
gross sales were permitted under  the Commission's regulations, and
that although this point  had been "clarified to a significant degree
in 1985 in Power 


Developers," it was not until Turners Falls in 1991 that the 
Commission "removed any remaining ambiguity." Id. The  Commission
could hardly say, therefore, that prior to that  decision a QF was
either intentionally deceptive or even  merely negligent if it listed
its gross rather than its net  output in applying for QF


Finally, Connecticut Valley claims the Commission failed to  support
with substantial evidence a key factual determination,  namely, that
Claremont had a settled expectation it could  lawfully sell its gross
output when it entered into the con- tract. As Connecticut Valley
conceives the issue, the Com- mission must show that, in developing
and financing the SPP  facility, Claremont actually relied upon being
able to sell its  gross output.


The Commission never made a factual finding about Clare- mont's actual
reliance, however. Rather, the Commission  reiterated its general
policy "against invalidating contracts  for which a PURPA-based
challenge was not timely raised-- that is, before the contracts were
executed," so as not "to  upset the settled expectations of parties
to, and to invalidate  any of their obligations and responsibilities
under, such exe- cuted PURPA sales contracts." Id. at 61,419-20; see
also 83  FERC p 61,136, at 61,611. The Commission reasonably in- fers
the parties' settled expectations from the terms of their  executed
contract; either party may avoid such an inference  by including a
specific reservation in its contract or by  challenging the validity
of a contract provision at the time it  executes the contract.


Because the Commission did not make a factual finding  relative to
settled expectations, but rather drew a reasonable  inference in
accord with its established policy, it need not  support this aspect
of its decision with substantial evidence.  Nor does Connecticut
Valley claim that the Commission is  legally required to determine
settled expectations by making  a case-specific factual inquiry rather
than relying upon a rule  of general applicability. The only question
remaining, there- fore, is whether the Commission's application of its
general  rule in this case was arbitrary and capricious. See


ern Michigan Gas Co. v. FERC, 133 F.3d 34, 38 (D.C. Cir.  1998).
Connecticut Valley included no reservation clause in  the contract
suggesting disagreement about or uncertainty  over the purchase and
sale of Claremont's gross output; nor  was Connecticut Valley
challenging gross sales in court or  before the Commission at the time
it entered into the con- tract. We therefore conclude that the
Commission's applica- tion in this case of its general rule inferring
the settled  expectations of the parties to a contract from the terms
of  their agreement was not arbitrary or capricious.


III. Summary and Conclusion


We are without jurisdiction to review Connecticut Valley's  claim that
the orders under review violate s 210 of the  PURPA. As to Connecticut
Valley's other challenges, we  conclude that the Commission acted
within its remedial dis- cretion in refusing to revoke Claremont's QF
status or to  provide any other relief to Connecticut Valley.
Therefore,  the petition for review is


Denied.