217 F.3d 24 (1st Cir. 2000)
TOWN OF NORWOOD, MASSACHUSETTS, Petitioner,v.FEDERAL ENERGY REGULATORY COMMISSION, Respondent.NEW ENGLAND POWER COMPANY, Intervenor.
No. 99-2155
United States Court of Appeals  For the First Circuit
Heard April 6, 2000Decided June 29, 2000Rehearing and Suggestion for Rehearing En Banc Denied Aug. 25, 2000

Charles F. Wheatley, Jr. with whom Wheatley & Ranquist, Kenneth M. Barna, Alan K. Posner and Rubin & Rudman were on brief  for petitioner.
Larry D. Gasteiger with whom Douglas W. Smith, General  Counsel, and John H. Conway, Acting Solicitor, were on brief for  respondent.
Edward Berlin with whom Robert V. Zener, Swidler Berlin  Shereff Friedman, LLP and John F. Sherman, III, Associate General  Counsel, The New England Electric System Companies, were on brief  for intervenor.
Before: Boudin, Stahl and Lipez,  Circuit Judges.
BOUDIN, Circuit Judge.


1
In this case, the Town of  Norwood, Massachusetts, seeks review of orders of the Federal  Energy Regulatory Commission ("FERC") denying Norwood's petition  for declaratory rulings.  The case is a sequel to Town of Norwood v. FERC, 202 F.3d 392 (1st Cir.), petition for cert. filed (U.S.  May 30, 2000) (No. 99-1914) ("Norwood I"), in which this court  sustained related FERC orders.  See also Town of Norwood v. New  England Power Co., 202 F.3d 408 (1st Cir.), petition for cert.  filed (U.S. May 30, 2000) (No. 99-1913) ("Norwood II").  The  pertinent facts, for which detailed background can be found in Norwood I and II, are as follows.


2
For many years, New England Power Company was a major  integrated electric utility in New England:  it generated power,  distributed it as a wholesaler to affiliates and non-affiliates  alike, and retailed power through its local affiliates such as  Massachusetts Electric Company.  Norwood, which operates a  municipal electric company that distributes retail power to  residents and businesses in the town, was a long-time purchaser of  power from Boston Edison Company, but in 1983 Norwood began to  purchase power instead from New England Power.


3
This opportunity to switch power suppliers was secured  after Norwood settled an antitrust case against Boston Edison and  New England Power.  See Norwood II, 202 F.3d at 412.  The  settlement agreement obligated New England Power to furnish, and  Norwood to accept, sufficient power to satisfy Norwood's  requirements for electricity through October 31, 1998.  The power  was to be supplied pursuant to New England Power's FERC Tariff No.  1--the same wholesale tariff under which New England Power then  supplied electricity to its own retail affiliates--"as [it] may be  amended from time to time."  Id.


4
The requirements contract provided that its term was from  November 1, 1983, to October 31, 1998, but it also stated that  "[n]either [New England Power] nor Norwood will give notice of  termination prior to November 1, 1991 and shall not specify a  termination date prior to November 1, 1998."  New England Power's  FERC Tariff No. 1, incorporated by reference in its power contract  with Norwood, said that "[o]nce initiated, service under this  tariff shall continue until terminated by either party giving to  the other at least seven years' written notice of termination. . .  ." Thereafter, the parties twice amended the requirements  contract.  First, in 1987 the contract was amended to permit  Norwood to take advantage of allocations of lower-cost power from  the New York Power Authority.  Second, in 1989 the parties amended  the contract to permit Norwood at its election to extend the  earliest date on which notice of termination could be given from  November 1, 1991, to November 1, 2001.


5
On July 25, 1990, Norwood sent a letter to New England  Power stating that Norwood "hereby gives notice . . . that it  extends the date" for giving notice of termination from November 1,  1991, to November 1, 2001.  The letter continued:  "The effect of  this is that the Power Contract between [New England Power] and  Norwood would be extended for [ten] years to midnight, October 31,  2008 . . . ."  Whether Norwood did intend to extend the contract  and whether the extension was effective are principal issues in  this case.


6
Beginning in December 1996, New England Power made a set  of regulatory filings to restructure itself and to revise its  existing tariff for wholesale power sales.  These filings,  described in detail and upheld in Norwood I, aimed to secure FERC  approval for the sale of New England Power's non-nuclear generating  facilities, the release (on payment of termination charges) of  affiliates from their long-term requirements contracts with New  England Power, and the restructuring of New England Power's  wholesale rates to facilitate customer choice and market-based  pricing at both the wholesale and retail levels.  Norwood I, 202  F.3d at 396-97.


7
In a set of orders issued between November 1997 and June  1998, FERC approved the sale, early termination by affiliates on  payment of termination charges, the restructuring of wholesale  rates, and a "rate freeze" on New England Power's existing charges  with wholesale contract purchasers like Norwood.  This freeze was  instituted because under the existing contracts, rates were  normally adjusted to reflect increased costs, and New England Power  was now divesting itself of its low-cost non-nuclear plants. Norwood II, 202 F.3d at 413.


8
Norwood concluded that under the new regime it would be  disadvantaged vis-a-vis New England Power's retail affiliates whom  Norwood regards as retail competitors.  See Norwood II, 202 F.3d at  414.  On March 4, 1998, Norwood notified New England Power that it  was switching to a new wholesale supplier, Northeast Utilities. Two weeks later, on March 18, 1998, New England Power filed a  revised FERC Tariff No. 1 permitting dissident wholesale customers  like Norwood to terminate their contracts early and on only thirty  days' notice, conditioned on the customers paying a contract  termination charge based on an avoided cost theory.1  New England  Power Co., 83 F.E.R.C. ¶ 61,174, reh'g denied, 84 F.E.R.C. ¶ 61,175  (1998).


9
To counter New England Power's March 18, 1998, tariff  filing, Norwood not only objected to the charge before FERC, seeNorwood I, 202 F.3d at 398, but also, in an effort to shorten the  period of liability, Norwood petitioned FERC in April 1999 for a  declaratory order, 18 C.F.R. § 385.207 (1999), that its contract  with New England Power had terminated on October 31, 1998, and that  New England Power therefore had no basis for claiming any contract  termination charges after that date.  Norwood estimates that if  fully allowed, the charges will exceed $7 million per year until  2008.


10
FERC dismissed Norwood's petition on the merits on June  21, 1999, Town of Norwood, 87 F.E.R.C. ¶ 61,341 (1999).  In a  nutshell, the Commission found that Norwood had extended the  contract through October 31, 2008, by its July 25, 1990, letter;  and it concluded that New England Power's failure to file that  letter with FERC was irrelevant.  On August 20, 1999, FERC denied  without opinion Norwood's motion for rehearing, and Norwood has  sought review in this court to challenge the Commission's orders,  16 U.S.C. § 825l(b).


11
Norwood's arguments on appeal, which we address in a  sequence somewhat different from Norwood's brief, are in substance  five:  (1) that the requirements contract with New England Power  was never extended beyond October 31, 1998; (2) that any extension  premised on the July 25, 1990, letter is ineffective because the  letter was not filed with FERC and because reliance upon it  violates the so-called filed rate doctrine; (3) that the FERC order  unilaterally altered the contract in disregard of the Mobile-Sierra doctrine; (4) that the failure to file the letter prevents FERC  from relying on it in construing the contract; and (5) that FERC  committed procedural error.


12
Assuming arguendo that the July 25, 1990, letter was  rightly considered, it is clear to us that FERC properly construed  the contract to extend Norwood's obligation to take its  requirements from New England Power until October 31, 2008.  The  standard of review need not be considered because, even if review  of the contract interpretation question were de novo, our reading  would still be precisely that of the Commission.  Cf. Boston Edison  Co. v. FERC, 856 F.2d 361, 363-64 (1st Cir. 1988).  The documents  may be inartfully drafted, but taken together, they make clear that  Norwood's contract interpretation argument is hopeless.


13
It is arguable that even without the July 25, 1990,  letter, the proper reading of the original 1983 contract made it  self-extending absent notice of termination.2  However, there is no  reason to decide how matters would stand if there had been no 1989  amendment and letter.  Norwood's July 25, 1990, letter triggered a  provision in the 1989 amendment to the original 1983 contract and  when both the amendment and the letter are considered, it is  crystal clear that--subject to any other possible legal barrier--Norwood's obligation was extended through October 31, 2008.


14
The 1989 amendment explicitly replaced the article of the  1983 agreement specifying the term of the contract with a new  article which specified that the contract continued through  midnight, October 31, 1998, except:  (1) neither side could give  notice of termination prior to November 1, 1991, or specify a  termination date prior to November 1, 1998; and (2):


15
Norwood may elect to extend the earliest  date by which either party can give notice of  intent to terminate service by a total of  [twenty] years in two ten-year increments.  In  order to exercise this election, Norwood  agrees to provide [New England Power] with  written notice of each such election at least  one year prior to the date that it is to be  extended, viz, to November 1, 2001 initially  and to November 1, 2011 ultimately.


16
Citing this amended article, Norwood on July 25, 1990, wrote New  England Power giving notice that it extended the date by which  either side could give notice of an intent to terminate "to  November 1, 2001.  The effect of this is that the Power Contract  between [New England Power] and Norwood would be extended for [ten]  years to midnight, October 31, 2008 . . . ."


17
Norwood argues that the letter was an offer that New  England Power failed to accept; but the 1989 amendment, which  Norwood explicitly invokes in the 1990 letter, gives Norwood a  unilateral election to extend by written notice, which is just what  the 1990 letter comprises.  Norwood also says that the 1990 letter  merely extends the earliest date on which the notice of termination  can be given and does not extend the agreement itself; but this is  just word play in the context of this contract.


18
Norwood makes a further contract interpretation argument  based on the 1987 amendment which was designed to allow Norwood to  reduce its obligation to purchase from New England Power to the  extent that Norwood could obtain a lower-cost allocation from the  New York Power Authority.  Norwood's explanation as to how this  1987 amendment supports its position is not persuasive enough to  merit detailed response.  The short answer is that the 1987  amendment, which had a quite limited focus, was followed by a 1989  amendment providing Norwood an election to extend the obligations  through 2008; and this provision for an election, which Norwood  exercised, controls any prior terms, whether adopted in 1983 or in  1987.


19
Norwood's second multi-part argument is that the July 25,  1990, letter was ineffective to extend the contract until 2008  because the letter was never filed with FERC.  The governing  provision of the Federal Power Act provides that utilities subject  to its terms, which includes New England Power with respect to  wholesale power sales, must file with FERC:


20
schedules showing all rates and charges for  any transmission or sale subject to the  jurisdiction of the Commission, and the  classifications, practices, and regulations  affecting such rates and charges, together  with all contracts which in any manner affect  or relate to such rates, charges,  classifications, and services.


21
16 U.S.C. § 824d(c) (1994) (emphasis added).  The statute also  requires that any change in a rate or contract must be reflected in  a filing with the Commission which, absent a waiver, must be made  in advance of the effective date and on sixty days' notice.  Id. §  824d(d).


22
Although the statute does not say so explicitly, it might  be read as saying that an unfiled contract is ineffective; and in  any event, FERC regulations say that a public utility may not (to  shorten the language to pertinent terms) "collect . . . any rate"  or "impose any . . . contract" for FERC-regulated service "which is  different from that provided in a rate schedule required to be on  file with this Commission unless otherwise specifically provided by  order of the Commission for good cause shown."  18 C.F.R. § 35.1(e)  (1999).  "Rate schedule" is defined to include both a statement of  rates and charges for electric service and "all classifications,  practices, rules, regulations or contracts which in any manner  affect or relate to the aforementioned service, rates, and  charges."  Id. § 35.2.  The importance attributed to filings is  reinforced by the so-called filed rate doctrine.


23
The filed rate doctrine, discussed at greater length in Norwood II, 202 F.3d at 416, 418-22, is actually a set of rules  that have evolved over time but revolve around the notion that  under statutes like the Federal Power Act, utility filings with the  regulatory agency prevail over unfiled contracts or other claims  seeking different rates or terms than those reflected in the  filings with the agency.  See, e.g., AT&T v. Central Office Tel.,  Inc., 524 U.S. 214, 221-24 (1998); Montana-Dakota Utils. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 251-52 (1951). Norwood's theory is that the unfiled July 25, 1990, letter was  ineffective because not filed (as required by statute and  regulations) and because giving the unfiled letter effect would  violate the filed rate doctrine.


24
In both variations, Norwood's argument depends on the  proposition that the July 25, 1990, letter was a contract required  to be filed.  The gist of the Commission's holding is that the contract was what was set forth in the 1983 contract and the 1989  amendment, both of which were filed with the Commission; the letter  merely exercised an election already spelled out in those filings. The Commission also gave other alternative reasons for relying on  the 1990 letter, which we will defer for the present.


25
The reference in the statute and regulations to the  filing of "contracts" which affect rates and services is ambiguous. On the one hand, the July 25, 1990, letter is not itself a contract  in common usage; it is the exercise of a unilateral election by one  party under an already existing contract.  On the other hand, the  election had the effect of extending the contract term by multiple  years, albeit within the framework of the existing contract.  If  the Commission wanted to characterize such notices as "contracts,"  it would be a linguistic stretch but arguably within the  Commission's authority to construe its organic statute and  regulations.


26
However, the Commission has construed the statute and  regulations not to encompass a notice of election already provided  for by a duly filed contract.  This interpretation is subject to  substantial deference under the Chevron doctrine.3  Further, in the Towns of Concord and Wellesley v. FERC, 844 F.2d 891 (1st Cir.  1988), this court upheld a decision of FERC giving effect to an  unfiled letter terminating a provision in a filed agreement where  the agreement itself contemplated such a termination letter.  The  analogy offered was to automatic rate adjustment clauses which,  "[o]nce the rate schedule is approved, [permit] rate adjustments  [to] be made in accordance with the internally-prescribed automatic  adjustment clause without further notice to action by the  Commission."  Id. at 896 (citing 16 U.S.C. § 824d(f)); see alsoTranswestern Pipeline v. FERC, 897 F.2d 570, 578 (D.C. Cir.), cert.  denied, 498 U.S. 952 (1990).


27
Norwood counters by citing Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571 (1981) ("Arkla"), but we think that case is  distinguishable.  There, the Supreme Court held that a filed tariff  rate for the purchase of natural gas prevailed over Arkla's  promise, made in a filed agreement, to pay a higher rate if Arkla paid more to other producers (the "favored nations" clause).  But  the Supreme Court stressed that it was unclear whether FERC would  have accepted the higher rate resulting from the favored nations  clause--by contrast to our case; and FERC said in Arkla that its  acceptance of the contract did not constitute pre-approval of any  rate generated by the favored nations clause.  See Arkla, 453 U.S.  at 578-82 & n.11.


28
Needless to say, without the filing of the July 25, 1990,  letter, no outsider could visit the Commission's files and  determine  whether the election to extend had been exercised.  This  provides whatever policy argument there might be for a broad  interpretation of "contracts" in the statute.  But even in the  halcyon days of strict public utility regulation, now receding at  FERC as elsewhere, see Norwood I, 202 F.3d at 396, there were gaps  in what could be gleaned from Commission filings.  And this is the  kind of grey area--the determination of just what the Commission  needs to have filed beyond formal contracts themselves--in which  great weight must be given to the Commission's judgment.  City of  Cleveland v. FERC, 773 F.2d 1368, 1376 (D.C. Cir. 1985).


29
We thus conclude that the Commission did not act contrary  to the Federal Power Act or its own regulations in giving effect to  the unfiled July 25, 1990, letter as an election to extend the term  of the contract.  By the same token it is unnecessary to elaborate  on the filed rate doctrine because giving effect to the notice does  not circumvent any filing requirement or contradict any extant  filing.  This is enough to resolve the claims made by Norwood and  makes it unnecessary for us to consider what we regard as more  doubtful alternative reasons given by the Commission for its order.


30
By contrast, in our case there is no effort by anyone to charge or obtain a rate different than that on file with the Commission. And, as for duration, all of the contract terms being given effect by the FERC orders under review are on file with the Commission; the Norwood-New England Power contract amendment, filed with the Commission in 1989, explicitly permitted Norwood to elect to extend the contract (which Norwood then did). Thus, the Commission, when it accepted the amendment for filing, knew that Norwood now had the option to extend the duration by specific increments. This is a situation very different from Arkla where, based on a "favored nations" clause containing no specific rate, the producer sought--over the Commission's expressed objection--to recover from the purchasing utility a rate for natural gas higher than the specific rate on file with the Commission.


31
Third, because we accept the Commission's interpretation  of the July 25, 1990, letter as representing Norwood's election to  extend its contract to 2008, the Mobile-Sierra doctrine invoked by  Norwood does not apply.  That doctrine prohibits a regulated  utility from unilaterally changing the fixed terms of a utilities  contract absent a finding by FERC that the existing term adversely  affects the public interest.  FPC v. Sierra Pacific Power co., 350  U.S. 348, 353-55 (1956); United Gas Pipe Line v. Mobile Gas Serv.  Corp., 350 U.S. 332, 343-45 (1956).  FERC's reasonable construction  of a contract in favor of a public utility is not a unilateral  change in the contract.


32
In its fourth argument for reversal, Norwood argues that,  if New England Power was not required to file the July 25, 1990,  letter, then FERC lacked the authority to interpret it.  This might  be so if the letter's subject matter were outside FERC's  jurisdiction--for example, if it addressed only intrastate power  sales.  Cf. Pennzoil v. FERC, 645 F.2d 360, 382 (5th Cir. 1981), cert. denied, 454 U.S. 1142 (1982).  However, there is no doubt  that the letter in this case related to a filed contract for the  wholesale supply of electric power within FERC's jurisdiction.


33
FERC sometimes declines to address contract issues even  for sales unquestionably within its jurisdiction, see, e.g., Southern Cal. Edison Co., 85 F.E.R.C. ¶ 61,023 (1998), but Norwood  makes no claim that FERC is forbidden from interpreting contracts  filed with FERC or otherwise relevant to FERC tariffs.  Here, the  duration of the contract directly affects Norwood's liability under  the March 1998 tariff imposing a termination charge; and Norwood  itself sought the declaration from FERC as to whether the contract  continued past October 1998.  The letter was properly considered as  a document pertinent to determining the duration of the contract. Cf. Southern Union Co. v. FERC, 857 F.2d 812, 815-16 (D.C. Cir.  1988), cert. denied, 493 U.S. 1072 (1990).


34
Finally, Norwood offers a procedural objection to the Commission's proceedings.  After FERC issued its notice of the  filing of Norwood's petition for a declaratory ruling, FERC granted  New England Power leave to intervene out of time, and it  accepted  New England Power's answer to Norwood's petition.  Norwood now  complains because FERC then denied Norwood's motion for leave to  file a reply, citing a FERC procedural rule prohibiting answers to  answers.  18 C.F.R. § 385.213(a)(2) (1999).


35
Perhaps in some situations it might be improper for an  agency effectively to deny the petitioner the right to respond to  assertions raised for the first time in an answering document,  although refusal to allow a formal "reply" is not automatically the  same as precluding evidence or argument.  The short answer in this  case is that nothing in Norwood's proffered reply, which is  included in the appendix filed with this court, alters the result: in general, the reply sets forth arguments that were effectively  addressed by FERC in its orders or could not affect the outcome in  light of dispositive rulings by FERC.


36
The petition for review is denied.



Notes:


1
 The contract termination charge is computed as the revenues  that New England Power would have expected to collect had the  customer continued to pay at the now frozen tariff rate through the  earliest date that the customer could have unilaterally terminated  service under the contract, less the expected costs avoided by New  England Power because it did not have to provide the power.


2
 The original contract said that its term was through October  31, 1998, but FERC Tariff No. 1. said that seven years' notice is  required to terminate; while the contract has an overrule  provision, it is not clear that the two terms are inconsistent.


3
 Chevron U.S.A. Inc. v. Natural Resources Defense Council,  Inc., 467 U.S. 837, 842-45 (1984); see also Mississippi Power &  Light Co. v. Mississippi, 487 U.S. 354, 380-82 (1988) (Scalia, J.,  concurring); City of Cleveland v. FERC, 773 F.2d 1368, 1376 (D.C.  Cir. 1985).


