 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued December 7, 2012           Decided January 22, 2013

                       No. 11-1258

                 TC RAVENSWOOD, LLC,
                      PETITIONER

                            v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT

                AER NY-GEN, LLC, ET AL.,
                     INTERVENORS


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


    Kenneth L. Wiseman argued the cause for petitioner.
With him on the briefs were Mark F. Sundback, Lisa M.
Purdy, William M. Rappolt, J. Peter Ripley, and Kristine L.
Delkus.

    Jennifer S. Amerkhail, Attorney, Federal Energy
Regulatory Commission, argued the cause for respondent.
With her on the brief was Robert H. Solomon, Solicitor.
                               2

     Joseph B. Nelson, Neil H. Butterklee, Joseph J. Saltarelli,
and Elias G. Farrah were on the brief for intervenors Long
Island Power Authority, et al. in support of the respondent.

   Before: TATEL and BROWN, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.

    WILLIAMS, Senior Circuit Judge:               Petitioner TC
Ravenswood, LLC objects to an order of the Federal Energy
Regulatory Commission that allowed certain rates to be
reduced as a corrective to the exercise of “supply-side” market
power, but which declined to resolve Ravenswood’s call for a
parallel intervention to protect suppliers from what
Ravenswood calls “buy-side” market power—in practice, two
specific behavior patterns that artificially depress rates. Under
the circumstances of this case, we uphold the Commission’s
decision.

                             * * *

     The New York Independent System Operator (“NYISO”)
operates the bulk power transmission system in New York
State. It conducts auctions both for energy and for capacity;
all suppliers whose bids are at or below the market-clearing
price are compensated at that price. Keyspan-Ravenswood,
LLC v. FERC, 474 F.3d 804, 806 (D.C. Cir. 2007); see also
Simon v. KeySpan Corp., 694 F.3d 196, 198-99 (2d Cir. 2012)
(explaining how the auctions work). On occasion NYISO
requires a generator to provide energy needed for local
“reliability” even if it would not have been selected through
the ordinary auction system. Resp. Br. 7 (citing New York
Indep. Sys. Operator, Inc., 131 FERC ¶ 61,169, at P 2
(2010)). When a generator is “committed” or “dispatched”
                               3

for reliability, NYISO normally compensates the generator for
the difference between its bid and the amount it receives in the
market. See, e.g., New York Indep. Sys. Operator, Inc., 139
FERC ¶ 61,001, at P 5 & n.5 (2012).

     But where the Federal Energy Regulatory Commission
believes that the bid of a generator committed for reliability
reflects the exercise of market power, it allows NYISO to
“mitigate” (in plain English, to reduce) the generator’s
compensation. Here the Commission approved a tariff
proposed by NYISO calling for rate reductions (under
specified conditions) to the level of a reliability generator’s
“reference price,” roughly its marginal cost. See New York
Indep. Sys. Operator, Inc. (“Order”), 133 FERC ¶ 61,030
(2010), reh’g denied, New York Indep. Sys. Operator, Inc.
(“Order on Rehearing”), 135 FERC ¶ 61,157 (2011).

     The mitigation measures approved apply only to
reliability energy supplied by generators located in the so-
called “rest-of-state” area (the entire state of New York other
than New York City and Long Island). Ravenswood owns
only one generator, which is located in New York City. It is
therefore not directly affected by the Commission’s approval
of NYISO’s mitigation proposal.

     In a response to the proposal, however, Ravenswood
argued that New York energy suppliers generally do not earn
enough revenue to cover their costs, and that the proposed
mitigation measure would exacerbate that shortfall. Order,
133 FERC ¶ 61,030, at P 20. To balance that effect, it asked
for measures to counteract “uneconomic entry” that has
allegedly depressed rates in the capacity market.

    Ravenswood addressed two forms of uneconomic entry.
The first is a phenomenon that the Commission has
recognized and, indeed, one that NYISO has sought to
                              4

counteract in New York City by means of a price floor. See
New York Indep. Sys. Operator, Inc., 122 FERC ¶ 61,211, at
PP 100-06 (2008). It occurs when a large net buyer of
capacity makes a capacity purchase or investment and then
offers the capacity for sale at auction at reduced prices, thus
lowering the market-clearing price. Id. at P 101. Since all
capacity suppliers receive the same price from a given
auction, such conduct helps the net buyer whenever the
reduction in its overall purchase costs exceeds its losses in
selling the underpriced capacity.         But the maneuver
concomitantly harms net suppliers.

     Ravenswood asserts comparable uneconomic entry in the
form of federal and state policies subsidizing certain types of
power generation, such as wind power. See, e.g., Pet’r Br. 24-
25; Testimony of Roger Williams, Sept. 2, 2010, Joint
Appendix (“J.A.”) 148-65; see also Energy Info. Admin., U.S.
Dep’t of Energy, Federal Financial Interventions and
Subsidies in Energy Markets, at xvi tbl. ES5 (2008), available
at http://www.eia.gov/oiaf/servicerpt/subsidy2/pdf/subsidy08.
pdf (estimating “subsidies and support to electricity
production” by type of energy, calculated in dollars per
megawatt hour, for fiscal year 2007). Because the subsidies
allow generators of such energy to profitably make bids that
are below their costs, they reduce the market-clearing auction
price. This both pushes some resources out of the market
(those generators whose bids exceed the artificially lowered
market price), and reduces the prices received by generators
that remain in the market.

    Ravenswood asked the Commission to mandate
mitigation measures to counteract the effects of both forms of
uneconomic entry. The Commission declined to do so. It
reasoned first that no commenter had submitted evidence that
NYISO’s mitigation proposals would prevent generators from
recovering their full costs. Order, 133 FERC ¶ 61,030, at P
                                5

54. It also noted that in periods of market-wide scarcity, when
the auction price would exceed the marginal costs of
“virtually all generators,” generators’ (non-reliability) sales in
the energy market would contribute to their recovery of fixed
costs. Id. at P 51. Finally, it noted that NYISO had already
begun an internal stakeholder procedure to address the general
issue of fixed-cost recovery, including any effect of the
approved mitigation measure. Id. at P 54. It denied rehearing
in similar terms. Order on Rehearing, 135 FERC ¶ 61,157.

                             * * *

     The Commission argues first that Ravenswood lacks
Article III standing to challenge the Commission’s approval
of the mitigation measure.       To establish constitutional
standing, a party must satisfy three familiar requirements—
injury-in-fact, causation, and redressability.      Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992). The
Commission argues that its orders inflict no injury on
Ravenswood (an argument that can be framed in terms of
either injury or causation).

     The Commission’s argument is superficially compelling.
As the Commission points out, the mitigation measure
adopted applies only to generators located in the rest-of-state
area, and Ravenswood owns but a single generator, which is
located in New York City. Thus it sells no energy subject to
the mitigation measure.

     Ravenswood’s injury, however, arises not from what the
Commission did but from what it refused to do—namely, to
address Ravenswood’s claim to protection from uneconomic
entry. While in some cases the benchmark for ascertaining
the existence of an injury is the status quo ante, in others it is
the difference between what the plaintiff sought and the
agency granted. Examples of the latter include parties’ claims
                               6

to a tax exemption, Texas Monthly, Inc. v. Bullock, 489 U.S. 1
(1989), government contract bidders’ challenges to a
contract’s award to another, Scanwell Labs., Inc. v. Shaffer,
424 F.2d 859, 861-73 (D.C. Cir. 1970), and regulated utilities’
claims to the entirety of a rate increase where the agency
granted less than requested, NEPCO Municipal Rate
Committee v. FERC, 668 F.2d 1327, 1332-42 (D.C. Cir.
1981). (The last case does not discuss standing, evidently
because it was so obvious.)

     Perhaps recognizing that exclusive focus on its approval
of NYISO’s proposals makes no sense, the Commission also
redeploys an argument that it made in its orders—that
Ravenswood has other avenues, such as the ongoing
stakeholder process, to air its complaints about uneconomic
entry. Resp. Br. 23-24. But even if we assume the adequacy
of those avenues, denial of remedies in this proceeding at a
minimum exposes Ravenswood to some delay.

     At oral argument, Commission counsel claimed that
Ravenswood makes no sales into the rest-of-state capacity
market, the domain for which it sought measures against
uneconomic entry. If true, that would likely defeat any claim
of injury. But Ravenswood asserted in its opening brief that
“from time-to-time [it] makes sales into the [rest-of-state]
energy and capacity markets.”            Pet’r Br. 34.      The
Commission’s brief specifically notes that passage, see Resp.
Br. 21, but doesn’t question its truth; nor does anything in the
record appear to cast doubt on it.

     We note finally that the “Standing” section of
Ravenswood’s initial brief relies mostly on an argument that
Ravenswood is injured by the supply-side mitigation rules
approved by the Commission in the orders, see Pet’r Br. 33-
34, rather than the more nuanced argument we have set forth
here. Nonetheless, it would be a triumph of formalism to let
                               7

this defeat Ravenswood’s claim. Ravenswood’s briefs and the
administrative record make clear that Ravenswood’s
grievances (with one exception noted below) are with the
Commission’s refusal to address allegations of uneconomic
entry, not with the merits of the supply-side mitigation
mechanism itself. See, e.g., id. at 3-4 (describing this case as
about “FERC’s failure to establish a comprehensive and
balanced market power mitigation structure” and explaining
that the problem arises from failure to address uneconomic
entry); Request for Rehearing of TC Ravenswood, LLC and
TransCanada Power Marketing, Ltd., at 6-9, New York Indep.
Sys. Operator, Inc., 133 FERC ¶ 61,030 (focusing
predominantly on the argument that “the Commission can’t
simply address half of a potential market power problem when
seeking to address actions that would not be expected in a
competitive market”); cf. Feature Grp. IP W., LLC v. FCC,
424 F. App’x 7, 9 (D.C. Cir. 2011) (“[A]lthough [petitioner’s]
statement in its opening brief establishing standing leaves
much to be desired, we conclude that . . . Article III standing
is evident from the administrative record.”).

     As to one of Ravenswood’s arguments, the Commission’s
standing contention is on target. The Commission brushed
aside Ravenswood’s suggestion that the Commission include
a scarcity-pricing mechanism in the mitigation measures.
Request for Rehearing of TC Ravenswood, LLC and
TransCanada Power Marketing, Ltd., at 6-7. Ravenswood—
which is not subject to the mitigation measures—offers
nothing to suggest that this ruling affected its cognizable
interests.

    We thus proceed to the question of the Commission’s
refusal to use this proceeding to address problems of
uneconomic entry.
                               8

                             * * *

      The core of Ravenswood’s claim is that “acceptance of
supply-side mitigation measures without any counterbalancing
buy-side mitigation measures” violated the Commission’s
“general policy against single-issue rate filings.” Pet’r Br. 34-
35. It also reframes this as an argument that the Commission
unlawfully refused to “provide for a comprehensive market
design.” Id. at 41. Its basic idea is that by approving a
utility’s elimination of a generally price-inflating practice
without eliminating (or at least seriously considering
eliminating) a generally price-suppressing practice, the
Commission violated its duty to assure the utility’s tariff
reflects “just and reasonable” rates and service terms. See
Federal Power Act § 205, 16 U.S.C. § 824d.

     The Commission first contends that we lack jurisdiction
to consider the argument because Ravenswood failed to
include it in its request for rehearing. See id. § 313(b), 16
U.S.C. § 825l(b). In fact, however, Ravenswood’s request for
rehearing raised essentially the same arguments as its briefs
before us do, though not citing precisely the same authority.
Compare, e.g., Request for Rehearing of TC Ravenswood,
LLC and TransCanada Power Marketing, Ltd., at 3, with Pet’r
Br. 35.

      On the substance, we start with two basic assertions by
the Commission that Ravenswood never seriously contests:
first, that Ravenswood and its fellow commenters failed to
offer data demonstrating “that market participants generally
will be unable to recover their costs due to application of the
proposed mitigation provisions,” and second, that NYISO had
already begun an internal stakeholder procedure to address the
general issue of fixed-cost recovery, including any effect of
the approved mitigation measure. Order, 133 FERC ¶ 61,030,
                               9

at P 54. Thus we not only have no reason to think that “the
total effect of the rate order” is unjust and unreasonable, Fed.
Power Comm’n v. Hope Natural Gas Co., 320 U.S. 591, 602
(1944), but we have affirmative reason to believe that
Ravenswood will have an adequate opportunity to pursue
remedies for possible uneconomic entry.

     It is true, of course, that the Commission may not slice
and dice issues to the prejudice of a party. An agency abuses
its “broad discretion in determining how best to handle
related, yet discrete, issues in terms of procedures and
policies,” Mobil Oil Exploration & Producing Se. Inc. v.
United Distrib. Cos., 498 U.S. 211, 231 (1991), “when its
manner of proceeding significantly prejudices a party or
unreasonably delays a resolution,” La. Pub. Serv. Comm’n v.
FERC, 482 F.3d 510, 521 (D.C. Cir. 2007). For example, if
the Commission granted a utility a rate increase based on a
specific set of cost increases yet refused to consider
customers’ claims that these were wholly or partially offset by
changes in other costs, it would surely abuse that discretion.
Cf., e.g., Southwestern Pub. Serv. Co. v. FERC, 952 F.2d 555,
560-63 (D.C. Cir. 1992); Carolina Power & Light Co. v.
FERC, 860 F.2d 1097, 1101-02 (D.C. Cir. 1988); City of
Westerville v. Columbus S. Power Co., 111 FERC ¶ 61,307, at
PP 14, 18 & n.11 (2005).

     Here, however, we are not convinced that there has been
any abuse of discretion. In the first place, Ravenswood
exaggerates the integrated character of the two issues—
mitigation of market power exercised by generators supplying
reliability energy and correction of the two forms of
uneconomic entry in the capacity market—by calling them
matters of supply-side and buy-side “market power.”
Granted, they both involve distortion of competitive results,
but market power and subsidies seem to be different brands of
distortion.
                              10

     Second, in struggling to address the complexities posed
by regional integration and independent systems operators the
Commission has pursued an iterative process, with our
explicit approval in at least one case. In TC Ravenswood v.
FERC, 331 F. App’x 8 (D.C. Cir. 2009), we rejected
Ravenswood’s claim that the Commission’s approval of an
NYISO tariff amendment providing incremental variable cost
compensation to dual fuel generators required it immediately
to consider compensation for fixed costs related to reliability.
Those issues seem at least as integrally related as the issues
involved here, but we nonetheless approved the Commission’s
“incremental approach to [the] problem.” Id. at 9.

     Finally, the specific context of the mitigation orders here
itself exemplifies the iterative process. The Commission had
previously accepted an NYISO filing applying the mitigation
principle to three specific generators, and in doing so had
observed that NYISO had submitted to the stakeholder
process a proposal for mitigation generally. See New York
Indep. Sys. Operator, Inc., 131 FERC ¶ 61,169, at PP 101-02
(2010), reh’g pending; Order, 133 FERC ¶ 61,030, at PP 3-4.
This of course is just the process to which the Commission
has here remitted Ravenswood. Although delay may be
costly, just such delay has occurred in the process of
addressing supply-side market power, and it would take a far
clearer case than this to justify our disrupting the pattern
created by the Commission’s choices over how to sequence its
consideration of issues.

    We also reject Ravenswood’s argument that the
Commission violated due process and other obligations by
neglecting to answer Ravenswood’s arguments and proposals.
The Commission in fact adequately explained its rejection of
those proposals.
                          11

                        * * *

The petition for review is therefore

                                       Denied.
