 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT




Argued October 17, 2018             Decided January 18, 2019

                        No. 17-1243

                STATE OF NORTH CAROLINA,
                       PETITIONER

                              v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT

             CUBE YADKIN GENERATION, LLC,
                     INTERVENOR



          On Petition for Review of Orders of the
          Federal Energy Regulatory Commission



     James W. Doggett, Deputy Solicitor General, Office of the
Attorney General for the State of North Carolina, argued the
cause for petitioner. With him on the briefs were Joshua H.
Stein, Attorney General, and Matthew W. Sawchak, Solicitor
General.

   Robert M. Kennedy Jr., Senior Attorney, Federal Energy
Regulatory Commission, argued the cause for respondent.
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With him on the brief was Robert H. Solomon, Solicitor. Holly
E. Cafer, Attorney, entered an appearance.

    Michael F. McBride argued the cause for intervenor. On
the brief were Julia S. Wood, Sharon L. White, and Eli W.L.
Hopson.

   Before: WILKINS and KATSAS, Circuit Judges, and
SENTELLE, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
SENTELLE.

     SENTELLE, Senior Circuit Judge: North Carolina petitions
for review of Federal Energy Regulatory Commission
(“FERC”) orders involving the relicensing of the Yadkin
Hydroelectric Project No. 2197 (“Yadkin Project”). Petitioner
alleges that the license applicant, Alcoa Power Generating, Inc.
(“Alcoa”), misrepresented its plans to discontinue the use of
project power for industrial production at Badin Works, a
major source of employment in the state. North Carolina
alleges that Alcoa gained an unearned advantage and chilled
competition because no other applicant possessed Alcoa’s ace
in the hole: the ongoing industrial production at Badin Works
and its impact on the public interest. North Carolina proposes
that FERC reopen licensing proceedings, or, in the alternative,
recommend federal recapture of the Yadkin Project for transfer
to the state. We conclude that substantial evidence supports
FERC’s decision, and we deny North Carolina’s petition for
review.

   I.      BACKGROUND

    In 1958, Alcoa was awarded a fifty-year license to operate
the Yadkin Project, a series of hydroelectric dams on the
                                3
Yadkin River in North Carolina. The Yadkin Project powered
industrial production at Badin Works, an aluminum smelting
plant that provided approximately 1,000 jobs to citizens in the
state. In 2002, Alcoa began the process of applying for a new
license, immediately disclosing that aluminum production had
been “temporarily curtailed,” and that the Yadkin Project’s
excess energy was being “sold on the open market.” Alcoa,
again in 2004, informed FERC that the curtailment continued
due to “adverse business conditions,” and that “surplus
electricity” was being sold “into the market.” In its 2006
relicensing application, Alcoa explained that the Yadkin
Project was only providing “3 to 5 megawatts (MW) of
electricity” (or ~2% output) to Badin Works, so “the remaining
power [was being] sold to help offset the cost of electricity
purchases required for Alcoa’s other domestic smelting
operations.” None of Alcoa’s competitors filed timely
applications. 1

    In 2009, North Carolina requested that FERC recommend
federal recapture of the Yadkin Project for transfer to the state,
with North Carolina funding Alcoa’s “statutory net investment
and severance damages.” Months later, Alcoa formally
announced that Badin Works would permanently close, and all
aluminum smelting and manufacturing facilities would be
dismantled. In July of 2016, Alcoa declared its intent to sell
the Yadkin Project to Cube Yadkin Generation LLC (“Cube”),
and it applied for a license transfer. On September 22, 2016,
FERC issued Alcoa a new license and denied North Carolina’s
recapture proposal. Alcoa Power Generating, Inc., 156 FERC
¶ 62,210 (2016). The state petitioned for rehearing of that
1
  In 2013—seven years after the deadline for applications—a
competitor, New Energy Capital Partners LLC, moved to intervene
and reopen licensing. FERC denied that request as untimely. See
New Energy Capital Partners, LLC v. FERC, 671 F. App’x 802, 803
(D.C. Cir. 2016).
                               4
decision. In December of 2016, FERC approved the transfer
of Alcoa’s license to Cube, and the sale of the Yadkin Project
was completed in 2017 for an after-tax value of approximately
$243 million. Final resolution came on September 20, 2017,
when FERC denied North Carolina’s petition for rehearing.
Alcoa Power Generating Inc., 160 FERC ¶ 61,097 (2017).

     On November 16, 2017, North Carolina petitioned this
Court to review FERC’s orders. The Court permitted Cube to
intervene. The matter was fully briefed, and the Court heard
oral argument on October 17, 2018.

   II.      DISCUSSION

     We review FERC orders under the Administrative
Procedure Act (“APA”), which empowers the Court “to reverse
any agency action that is ‘arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.’” See, e.g.,
Wisconsin Valley Improvement Co. v. FERC, 236 F.3d 738,
742 (D.C. Cir. 2001) (quoting 5 U.S.C. § 706(2)(A)). The
Court owes deference to FERC’s interpretation of the Federal
Power Act (“FPA”) since it is the agency charged with
administering that statute. See Chevron, U.S.A., Inc. v. Nat.
Res. Def. Council, Inc., 467 U.S. 837 (1984); e.g., TNA Merch.
Projects, Inc. v. FERC, 857 F.3d 354, 358 (D.C. Cir. 2017).
Unless “plainly erroneous,” the Court also extends deference
to FERC’s interpretation of its own regulations. See, e.g., City
of Oswego v. FERC, 97 F.3d 1490, 1498 (D.C. Cir. 1996);
accord Auer v. Robbins, 519 U.S. 452 (1997).

         A. Relicensing Proceedings

    North Carolina avers foul play during the relicensing
proceedings. Specifically, North Carolina believes that Alcoa
engaged in a bait-and-switch by allegedly implying that the
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Yadkin Project would resume supplying power to Badin
Works, a major source of employment in the state. North
Carolina argues that FERC should reopen licensing because
Alcoa’s alleged misrepresentations (1) served as patent
deficiencies in its application and (2) gained Alcoa an unearned
advantage by chilling competitors from applying.

     Because Alcoa was the lone applicant, if its application
truly was patently deficient, see 18 C.F.R. § 4.32(e), FERC
should have reopened licensing and “solicit[ed] applications
from potential applicants other than the existing licensee,” see
18 C.F.R. § 16.25(a). See also Oconto Falls v. FERC, 41 F.3d
671, 672, 676–77 (D.C. Cir. 1994) (analogizing relicensing
proceedings to those of an “orphaned project”—a project
where “the licensee files a notice of intent to apply for a
relicense but neither the licensee nor any other applicant files a
timely [and valid] relicense application”). Indeed, it is
uncontested that FERC generally has the authority to reopen
licensing and fashion alternative remedies when equity or
justice demands. See 16 U.S.C. § 825h. However, substantial
evidence contradicts the existence of any deficiencies or
deception in Alcoa’s application.

     Alcoa disclosed the curtailment of industrial production at
Badin Works every step of the way, from its initial filing of
intent to relicense, through its various correspondences with
FERC, to the license application itself. Nothing in the record
demonstrates any nefarious intent by Alcoa or Cube to deceive
FERC or the public at large regarding the status of Badin
Works. Although Alcoa initially characterized the curtailment
as “temporary” in 2002, its subsequent missives reflected
worsening circumstances, so much so, that it assigned the
Yadkin Project’s electricity purchase contract. The continued
decline of Badin Works was publicly known, as were the
adverse market conditions facing the domestic, aluminum-
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smelting industry. Given that 98% of the power generated
from the Yadkin Project was being sold as of 2006, the fate of
Badin Works was apparent to any competitor wishing to pursue
the license.    Alcoa fully and accurately disclosed the
circumstances surrounding Badin Works, both in its
application and its correspondences more generally. Thus, no
unearned advantage or chilling effect could result.

     The loss of jobs from the closure of Badin Works is a dark
and menacing cloud that hangs over the state of North Carolina.
However, Alcoa did not conceal this impending squall, and
thus, FERC did not err by denying North Carolina’s request to
reopen licensing.

       B. Federal Recapture

     North Carolina also claims that FERC dismissed its federal
recapture proposal without engaging in a reasoned analysis.
The state’s proposal—albeit creative—lacked any basis in the
law.

     FERC possesses the authority to “not issue a new license
to the original licensee,” and instead recommend that the
federal government take over a hydropower project for “public
purposes.” 16 U.S.C. § 800(c). However, federal recapture is
limited to projects that the government “take[s] over and
thereafter . . . maintain[s] and operate[s].” See 16 U.S.C.
§ 807(a); Escondido Mut. Water Co. v. La Jolla Band of
Mission Indians, 466 U.S. 765, 769 n.4 (1984). Under North
Carolina’s proposal, the federal government would not
“maintain” or “operate” the Yadkin Project, but instead transfer
it to the state. North Carolina does not and cannot identify a
single case, statute, or regulation to provide authority for such
a taking-and-transfer. As the plain language of the FPA
establishes, Congress authorized federal recapture for federal
                                 7
use, not subsequent transfer to state entities. Although FERC
did not articulate this interpretation in its administrative orders,
we may deny the petition for review on this ground because the
statute is clear. See, e.g., Canonsburg Gen. Hosp. v. Burwell,
807 F.3d 295, 304 (D.C. Cir. 2015).

     In its decision, FERC correctly noted that North Carolina’s
proposal was pending for more than half a decade, ample time
for the state to lobby or negotiate with federal agencies. During
that time, however, no federal agency ever stepped forward to
volunteer for this transfer. The absence of any agency
volunteer evidences the fallaciousness of using the FPA’s
federal recapture for a state acquisition.

      Indeed, the FPA provides a number of ways for a state to
acquire a hydropower project, and North Carolina had and still
has options for obtaining the Yadkin Project if it so desires.
During the application period, North Carolina could have filed
its own competing application.              See 16 U.S.C.
§§ 797(e), 808(a)(1). The state could potentially have initiated
a condemnation proceeding of the Yadkin Project, acquiring
title for “just compensation” to the licensee. See 16 U.S.C.
§ 807(a). And North Carolina could have negotiated a transfer
from the licensee. See 16 U.S.C. § 801.

     The elephant in the room, as with many things in life, is
money. The cost of federal recapture equates to Alcoa’s “net
investment” plus severance damages. See 16 U.S.C. § 807(a);
Escondido, 466 U.S. at 769 n.4. This amount may be less than
“just compensation” or a negotiated transfer fee since the most
recent sale of the Yadkin Project cost $243 million. See id.; 16
U.S.C. § 801. Coincidentally, the closure of Badin Works and
the loss of jobs resulted in “a volcanic eruption . . . of anger” in
North Carolina that “became a major political issue,” with local
politicians seeking to use monies from the Yadkin Project to
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fund state initiatives, such as education. See Oral Argument at
10:00–10:43; 13:40–15:05; 16:00–16:40. However, thriftiness
and political pressure do not create a legal basis for federal
recapture when its sole purpose is transferring the hydropower
project to a state. Indeed, none exists. Therefore, FERC did
not err in denying North Carolina’s federal recapture proposal.

          C. Public Interest

     North Carolina also asserts that FERC erred in its licensing
decision by failing to consider the adverse impact that
permanent closure of Badin Works had on local employment
and the public interest. However, the industrial need for power
at the time of Alcoa’s application was only 2% of the Yadkin
Project’s output, so FERC’s analyses assumed that all project
power would be sold into the open market. See Final
Environmental Impact Statement, Yadkin Hydroelectric
Project – FERC Project No. 2197-073, FERC, April 2008, at
239; e.g., Oral Argument at 23:55–28:25. While the loss of
jobs caused by the permanent closure of Badin Works did
affect public interest, FERC had already accounted for its
impact. See id. Thus, North Carolina’s challenge to FERC’s
affirmative licensing decision is unavailing.

   III.      CONCLUSION

     For the reasons set forth above, we deny North Carolina’s
petition for review.
