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UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 92-4599
_____________________
GULF STATES UTILITIES CO.,
Petitioner,
VERSUS
FEDERAL ENERGY REGULATORY COMMISSION,
Respondent.
____________________________________________________
Petition for Review of Orders of the
Federal Energy Regulatory Commission
_____________________________________________________
(August 25, 1993)
Before REYNALDO G. GARZA, SMITH, and BARKSDALE, Circuit Judges.
BARKSDALE, Circuit Judge:
Gulf States Utilities Company (GSU) challenges the Federal
Energy Regulatory Commission's denial of both its request to
correct, retroactively and prospectively, claimed billing errors,
and its application for a waiver of related filing requirements,
arising from its contract with Cajun Electric Power Cooperative,
involving GSU's high-voltage electricity transmission system, owned
in part by Cajun. We REVERSE and REMAND.
I.
GSU is a utility company servicing customers in Louisiana and
Texas; and, under a Power Interconnection Agreement executed in
1978, it provides electricity transmission services to Cajun, a
government-funded rural electric cooperative in Louisiana. Because

Cajun's cost of capital is less than GSU's, due to Cajun's
government-funded status, GSU and Cajun executed Service Schedule
CTOC in 1980 (the CTOC agreement), which provided that the two
companies would establish a co-owned Integrated Transmission System
(ITS) comprised of qualified high-voltage transmission facilities
(QTFs).1 In exchange for its investment in the ITS, Cajun would
not be billed for its use of the ITS to the extent of that
investment. In essence, the plan allowed Cajun to invest in the
ITS in lieu of paying a portion of the bill that would otherwise be
payable to GSU.
The CTOC agreement established a rather complex billing
mechanism with regard to the ITS. In order to credit Cajun for its
investment, GSU was to deduct GSU's revenue requirements associated
with the ITS from Cajun's monthly general transmission charges, in
the form of "CTOC credits". The CTOC credits were to be
"determined on the basis of the methodology, procedures and data
used as the basis for GSU's transmission service rates most
recently approved or accepted for filing by FERC ...".
Additionally, in the event that Cajun's investment in the ITS
was not proportionate to its relative use, an equalization charge
would be imposed. The equalization charge was to be calculated by
multiplying the amount of Cajun's investment deficiency by a
percentage referred to as "Factor APM". Factor APM is computed by
dividing GSU's annual revenue requirement associated with the ITS
1
If GSU provides service to Cajun over its entire system, part
is provided over the ITS (owned in part by Cajun), and the rest is
provided over GSU's low-voltage facilities.
- 2 -

by its total investment in the ITS. For example, if GSU invested
a total of $100 million in the ITS, and its annual revenue
requirements for the ITS were $20 million, Factor APM would be 20%
for that year. Accordingly, Cajun's yearly equalization charge
would be 20% of the amount of its investment deficiency. Because
the monthly equalization charges were to be based on estimates, the
CTOC agreement also provided for annual "true-ups" once the actual
figures became available.
In early 1981, GSU submitted the CTOC agreement for FERC
approval. In response to FERC's request for additional
information, GSU specified, inter alia, the Factor APM to be used
initially. FERC accepted the agreement for filing that August, but
advised GSU that "any changes in the applicable Equalizing Charge
resulting from the use of a Factor APM different from that
specified in your instant filing, must be timely filed ... as a
change in rate schedule in accordance with [regulations]". FERC
did not similarly direct GSU to file changes to the CTOC credits,
and the CTOC agreement did not specify how such changes were to be
initiated or implemented. Accordingly, until GSU's filing in the
present proceeding, CTOC credits (as a component of the stated
rate) were never filed with FERC.
The CTOC agreement billing provisions took effect January 1,
1982, when Cajun acquired two high-voltage transmission lines --
QTFs -- from GSU. At that time, GSU computed Cajun's CTOC credits
from the data filed with FERC in GSU's most recent general
- 3 -

transmission rate filing, submitted in 1980. It used the specified
Factor APM (24.4047%), which was also based on that data.
In July 1982, GSU submitted new general transmission rates for
filing. FERC approved a settlement in that case in June 1983, with
the new rates made effective July 1982. See Gulf States Utils.
Co., 25 F.E.R.C. � 61,131 (1983).
GSU again submitted new general transmission rates in July
1985. In January 1987, FERC approved a settlement of that case,
which provided for two new rates -- one effective July 1985, and a
superseding rate effective July 1986. See Gulf States Utils. Co.,
38 F.E.R.C. � 61,048 (1987). Cajun intervened in the second (1985)
rate case to protest GSU's designation of the QTFs under the CTOC
agreement (QTF dispute),2 but the 1987 settlement agreement
expressly excluded any resolution of that dispute.3
As noted, in neither its 1982 nor its 1985 filing did GSU
separately designate revised CTOC credits or Factors APM. However,
upon each filing, it recalculated both, based on the new data
submitted, and billed Cajun accordingly. FERC accepted GSU's
refund compliance filings for each case in May 1984 and September
1987, respectively.
2
In sum, Cajun contended the GSU was not including QTFs owned
by Cajun, resulting in improper (excessive) equalization charges to
Cajun, and denying it proper access to the ITS.
3
Because of the QTF dispute, Cajun had stopped paying the true-
ups, and GSU had stopped billing Cajun under the CTOC rate
procedures. The settlement agreement provided: "This agreement is
not intended to resolve an existing billing dispute between Cajun
and [GSU] under the CTOC service schedule .... [T]his Agreement is
made without prejudice to Cajun's and [GSU's] rights regarding such
dispute and its ultimate resolution".
- 4 -

In July 1987, Cajun renewed its claims with FERC regarding the
QTF dispute, among others. GSU answered, and filed its own action
with FERC, proposing to cancel the CTOC agreement. FERC denied
GSU's request to cancel, see Cajun Elec. Power Corp., Inc. v. Gulf
States Utils. Co., 41 F.E.R.C. � 61,136 (1987), and affirmed the
denial on rehearing, see Gulf States Utils. Co., 42 F.E.R.C. �
61,163 (1988).
Meanwhile, GSU allegedly discovered that it had erred all
along in calculating the CTOC credits. In November 1987, after the
denial of its request to cancel the CTOC agreement, GSU began
billing Cajun using revised (lowered) CTOC credits, resulting in an
annual increase in the billings to Cajun of approximately $4
million. Cajun has paid those increased charges. Additionally, as
noted, GSU had never filed, as directed, the changes to Factor APM
from the figure initially filed in 1981. Accordingly, on June 20,
1988, GSU submitted for filing retroactive and prospective
revisions to the CTOC credits and Factors APM, requesting a waiver
of the Factor APM filing requirement for good cause.
In August 1988 (Initial Order), FERC rejected GSU's proposed
retroactive changes to the CTOC credits, holding that those credits
had been at issue in, and resolved by, the settlements of the 1982
and 1985 rate cases in 1983 and 1987, respectively. See Cajun
Elec. Power Corp., Inc. v. Gulf States Utils. Co., 44 F.E.R.C. �
61,259, 61,972 (1988) [hereinafter 44 F.E.R.C. at ____]. In
addition, it denied GSU's request for a waiver of the Factor APM
filing requirement. Id. at 61,970-71. For prospective application
- 5 -

only, FERC accepted GSU's proposed Factor APM, based on the 1986
rate, and set that matter for hearing. Id. Finally, for purposes
of hearing and decision, FERC consolidated GSU's proceeding with
Cajun's involving the QTFs. Id. at 61,972. With respect to the
CTOC credits, both GSU and Cajun requested clarification or, in the
alternative, rehearing.
Pending that rehearing, an ALJ held a hearing on the
consolidated matters, and issued a decision in May 1989. See Cajun
Elec. Power Corp., Inc. v. Gulf States Utils. Co., 47 F.E.R.C. �
63,024 (1989). The ALJ interpreted FERC's Initial Order to address
only pre-July 26, 1985, CTOC credits (the effective date of the
settled 1985 rate case). Id. at 65,057. Accordingly, he proceeded
to address the post-July 26, 1985, CTOC credit dispute, and held in
GSU's favor on the alleged errors. Id. at 65,057-58. He stated:
"[W]ith the understanding that [GSU's] calculations have been
somewhat erroneous in the past, I conclude that the methodology and
figures computed by [GSU's witness] now accurately project the CTOC
credits ...". Id.
In April 1992, nearly four years after its Initial Order, FERC
again rejected the proposed retroactive CTOC credits and Factors
APM, and denied the requested waiver of the Factor APM filing
requirement (Rehearing Order). See Cajun Elec. Power Corp., Inc.
v. Gulf States Utils. Co., 59 F.E.R.C. � 61,041, 61,137-41, 61,143
(1992) [hereinafter 59 F.E.R.C. at ____]. It upheld the ALJ's
determination regarding the Factor APM, based on the 1986 rates, to
be applied prospectively (from August 1988), id. at 61,143, but
- 6 -

reversed his finding with regard to post-July 1985 CTOC credits,
holding that that dispute was not properly before the ALJ in light
of FERC's Initial Order, id. at 61,138.
Reiterating that the CTOC credits for July 1985 forward had
been settled with the 1985 rate case, FERC ordered GSU to refund
amounts relating to revised CTOC credits which had been billed
since November 1987 using the allegedly correct method (as noted,
approximately $4 million annually). Id. at 61,141. Finally, "[t]o
reduce future confusion and uncertainty", FERC directed GSU in each
subsequent general transmission rate filing to delineate
specifically the CTOC credits. Id. at 61,137. GSU timely filed
its petition for review of the rulings on the CTOC credits and
Factors APM; the QTF dispute is not before us.
II.
GSU contends that FERC erred in (1) denying GSU a waiver of
the Factor APM filing requirement; (2) rejecting retroactive (pre-
August 21, 1988) changes to the CTOC credits; and (3) rejecting
CTOC credits for prospective effect (post-August 21, 1988).4
We will reverse a FERC order "only if [its] decision is
arbitrary, capricious, or otherwise not in accordance with law".
Monsanto Co. v. FERC, 963 F.2d 827, 830 (5th Cir. 1992) (internal
quotation omitted). This includes a determination of "whether each
of the order's essential elements is supported by substantial
4
Retroactive changes would apply to CTOC credits for the period
from initiation of the CTOC agreement until August 21, 1988 -- 60
days after GSU's filing of these proceedings, see FPA � 205(d), 16
U.S.C. � 824d(d), and imposition of a one day suspension, see 44
F.E.R.C. at 61,971.
- 7 -

evidence", and whether FERC "abused or exceeded its authority". In
re Permian Basin Area Rate Cases, 390 U.S. 747, 790, 792 (1968);
see also 5 U.S.C. � 706(2) (governing scope of judicial review of
agency decisions). "The `ultimate issue in judicial review of
[FERC's] determinations' is the requirement of `reasoned
consideration'". See Borden, Inc. v. FERC, 855 F.2d 254, 258-59
(5th Cir. 1988). Furthermore, "[n]o objection to the order of the
Commission shall be considered by the court unless such objection
shall have been urged before the Commission in the application for
rehearing unless there is reasonable ground for failure so to do".
16 U.S.C. � 825l(b); see United Gas Pipe Line Co. v. FERC, 824 F.2d
417, 433-34 (5th Cir. 1987).
A.
For use with the rates that became effective in 1982, 1985,
and 1986, GSU requested approval of Factors APM different from that
approved in 1981. Prior to 1988, as a result of using Factors APM
different from that approved in 1981, GSU collected approximately
$3.8 million more than it would have using the approved factor. It
has been ordered to refund that amount to Cajun. GSU contends that
"[w]ithout any explanation, [FERC] ignored [GSU's] showing of good
cause" for the waiver of the requirement that Factor APM changes be
filed as rate changes. Section 205(d) of the Federal Power Act
(FPA), 16 U.S.C. � 824d(d) provides:
Unless the Commission otherwise orders, no change
shall be made by any public utility in any [rates
subject to FERC's jurisdiction] except after sixty
days' notice to the Commission .... The
Commission, for good cause shown, may allow changes
- 8 -

to take effect without requiring the sixty days'
notice ....
Because the waiver provisions are committed to FERC's discretion,
GSU must show an abuse of that discretion. Hall v. FERC, 691 F.2d
1184, 1191 (5th Cir. 1982), cert. denied, Arkla, Inc. v. Hall, 464
U.S. 822 (1983).
In the Initial Order denying the waiver, FERC explained that
(1) GSU's failure to comply with the filing requirements was not
excused by the ongoing billing dispute with Cajun, because that
dispute involved the QTFs, not Factor APM; (2) contractual
provisions that fairly implied "some waiver of the notice
requirements" by Cajun did not contemplate GSU's lengthy delay in
filing the changes; and (3) GSU had been directed to file any
changes to Factor APM. See 44 F.E.R.C. at 61,970-71. In its
Rehearing Order, FERC noted GSU's contentions that denial of a
waiver would produce a windfall to Cajun, contrary to the
contractually established rates, and that Cajun, in the CTOC
agreement, impliedly waived any notice requirements. See 59
F.E.R.C. at 61,142. FERC summarily concluded, however, that it did
"not find good cause to grant [GSU's] request for waiver",
explaining only that GSU "failed to abide by the notice
requirement" of which it had been expressly advised. Id. at
61,143.
GSU disputes FERC's determination, and contends that FERC
wholly failed to address its good cause arguments; particularly,
that Cajun had notice of increases and, without protest, paid the
bills containing those increases. Additionally, GSU emphasizes
- 9 -

that the CTOC agreement provided for the increases and for some
waiver of the notice requirements (which, as noted, was
acknowledged by FERC), and that FERC already had approved the
general transmission rates upon which the Factor APM changes were
directly based.
FERC is vested with discretion in deciding whether to grant
the requested waiver; to find an abuse of that discretion requires
most substantial justification. We find it here. GSU has shown
good cause for the waiver, and FERC's summary discussion of the
reasons for its denial does not "set out clearly the ground that
forms the basis for the denial of discretionary relief", Columbia
Gas Dev. Corp. v. FERC, 651 F.2d 1146, 1160 n.18 (5th Cir. 1981),
such that we can determine whether it gave reasoned consideration
to GSU's assertions of good cause.
A principle purpose of the filing provisions of the FPA is "to
give advance notice of proposed rate changes" to the customer.
Union Texas Prods. Corp. v. FERC, 899 F.2d 432, 433 (5th Cir. 1990)
(reversing the denial of a waiver where, inter alia, the needed
information appeared elsewhere in the general transmission rate
filings). It does not appear that FERC gave consideration to
whether that purpose was satisfied here. Not only did Cajun have
actual notice of increases in Factor APM, but there appears to be
no dispute that the proposed changes are provided for by the CTOC
agreement. Therefore, the emphasis by FERC on GSU's delay of
several years in filing for a different factor is greatly
- 10 -

ameliorated. In short, the filing could not have come as a
surprise to Cajun.
In the final analysis, FERC's principal reason for denying the
waiver appears to be the fact that GSU failed to make the required
filings. But, needless to say, if this were the criteria for
denying a filing waiver, waiver would never be granted.
Additionally, GSU's failure to follow FERC's express instructions
to file Factor APM changes does not justify the $3.8 million
penalty which FERC, in effect, seeks to impose for the error. In
Union Texas, our court stated that "the Commission's punctilious
insistence that the failure to follow its directions in the minor
respect here involved should result in such a disproportionately
heavy penalty [$1.8 million] works a manifest injustice and
constitutes an abuse of discretion". 899 F.2d at 437. Although,
arguably, the error involved in Union Texas was more minor than
GSU's, the forfeiture still is not justified.
Accordingly, we reverse the denial of the waiver. Because
FERC has not passed on the correct Factor APM to be used in
relation to the 1982 and 1985 rates, we remand for such further
proceedings as it deems appropriate in this regard.
B.
GSU claims that it discovered that past bills had overstated
the CTOC credits. As noted, in November 1987, GSU began billing
Cajun using revised (lower) CTOC credits, resulting in Cajun being
charged annually approximately $4 million more; and Cajun has paid
those increased billings to date. In June 1988, GSU filed the
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corrected credits in this proceeding. At issue are both the pre-
August 21, 1988, billings (retroactive) and those billings
subsequent to then (prospective).
1.
With respect to GSU's proposed retroactive changes to the CTOC
credits, we also reverse. The dispute appears to involve highly
technical questions regarding the method of calculating CTOC
credits; the parties do not explain the details in their briefs.
In its Rehearing Order, FERC characterized the dispute as
reflecting "substantive questions with respect to the operation of
Service Schedule CTOC", rather than simple "billing errors". 59
F.E.R.C. at 61,137. With the exception of the ALJ's hearing in
late 1988, GSU has not been heard on the merits of these questions.
As noted, FERC's rejection of the proposed changes rests
solely on its determination that the CTOC credits were settled with
the respective general transmission rate cases. Initially, FERC
determined that the express exclusion of the "existing billing
dispute" in the 1987 settlement did not refer to the present
dispute. Id. at 61,138. It then reasoned (1) that Cajun may have
reasonably expected the methodology for calculating CTOC credits to
remain the same in the 1985 filing as in the 1982 filing; (2) that
Cajun may have reasonably anticipated the approximate revenue
impact of the settlements, including the CTOC credits; (3) that the
magnitude of the proposed revisions would "completely undo[] the
balancing of interests" that underlay FERC's approval of the
settlements as fair and reasonable and in the public's interest;
- 12 -

and (4) that particular CTOC credits were included in the general
transmission rate filings as components of the "CTOC Adjustment" in
the cost of service used to determine GSU's basic rates to all of
its transmission customers. Id. at 61,140-41 & n.74.
GSU contends that the express exclusion in the 1987
settlement, see supra note 3, did reference the present dispute.
It further contends that the record is devoid of evidence that the
settlements included any mention of particular CTOC credits or that
they were based on any assumptions about the CTOC credits.
Finally, GSU asserts that the filed rate doctrine mandates
correction of the alleged errors.5
As an initial matter, we find substantial evidence to support
FERC's conclusion that the present dispute was not expressly
excluded by the 1987 settlement. In making its determination, FERC
closely examined the relevant evidence, including Cajun's protest
to GSU's refund compliance report in the 1985 rate case, FERC's
letter order rejecting the initial refund compliance report,
Cajun's complaint in the QTF dispute, and GSU's answer in that
dispute. We need not restate FERC's reasoning with respect to
each; it thoroughly considered and discussed the evidence, and we
find its conclusions reasonable. Perhaps most persuasive is the
fact that GSU's claimed errors were assertedly not even discovered
until after execution of the settlement in 1986, approved by FERC
5
FERC contends that because GSU failed to specify the filed
rate doctrine as a basis for its position on rehearing, it is
jurisdictionally barred from raising it here. We need not address
this contention, because we do not rely on that doctrine as a basis
for our holding.
- 13 -

in January 1987. (As noted, GSU did not begin billing with the
revised CTOC credits until November 1987.)
That the present dispute was not expressly excluded by the
1987 settlement, however, does not resolve whether the CTOC credits
were settled (fixed) by either the 1983 or 1987 settlements. In
its Rehearing Order, FERC acknowledged that "[GSU] has never been
required by the terms of Service Schedule CTOC or by the Commission
to explicitly file the CTOC credits", 59 F.E.R.C. at 61,136, and
that "until the filing in this proceeding CTOC credits have never
been explicitly filed with the Commission as a numerical component
of the stated rate", id. at 61,135. It would seem unlikely,
therefore, that either settlement would include reference, either
express or implied, to the CTOC credits in issue.
FERC's first three reasons for holding that the CTOC credits
were included in the settlements constitute mere speculation.
First, FERC's conclusion that "it is not unreasonable to conclude"
that the CTOC credits would be calculated under the 1985 rates
using the same method that was used to calculate them under the
1982 rates, 59 F.E.R.C. at 61,140, does not address whether Cajun
actually made or relied upon any such conclusion during the
settlement negotiations. Moreover, this logic merely bootstraps
onto an assumption that changes based on the 1982 rates should be
rejected. Second, FERC's determination that "it is reasonable to
assume" that Cajun, in entering into the settlements, "anticipated
the approximate revenue impact, after netting of the CTOC credits",
id., similarly constitutes speculation in the absence of evidence
- 14 -

that any such anticipation occurred or was relied upon. Finally,
the bare statement that the magnitude of the proposed changes
renders them inconsistent with FERC's acceptance of the
settlements, id. at 61,141, is unsupported by any evidence that
assumptions regarding the amount of the CTOC credits somehow
underlay the settlements, and is most questionable in light of
FERC's own explanation that CTOC credits can be determined only
after the general transmission rates are fixed (settled).6 We find
no evidence, and FERC points to none, that any of these assumptions
were actually made or relied upon.
The only concrete basis for FERC's determination that the CTOC
credits were settled with the rate cases is its conclusion that
they were included in the settled rates as components of the CTOC
Adjustment, which comprises part of GSU's general transmission
rates. In its Initial Order, FERC noted that although GSU was not
6
In its Rehearing Order, FERC explained the CTOC credit
calculation process as follows:
[E]ach time a change in the basic transmission rate
is accepted or approved, under Service Schedule
CTOC an associated CTOC credit should be derived
based upon the cost assumptions used to develop the
basic transmission rate. If [GSU's] proposed basic
transmission rate is contested and subsequently
modified (for example, pursuant to a settlement
agreement), under Service Schedule CTOC the CTOC
credit should likewise be modified. Although ...
CTOC credits are a stated amount on each month's
transmission bill sent to Cajun, until the filing
in this proceeding CTOC credits have never been
explicitly filed with the Commission as a numerical
component of the stated rate.
59 F.E.R.C. at 61,135 (emphasis added). Thus, no CTOC credit can
be determined until after the general transmission rates are fixed.
- 15 -

required to file the CTOC credits, the data it submitted in support
of its proposed general transmission rates incorporated "a Cajun
rate reflecting only low voltage facilities" (i.e., the general
transmission rate less the CTOC credits). 44 F.E.R.C. at 61,972.
In its Rehearing Order, FERC explained that "[p]articular CTOC
credits were incorporated within the cost of service associated
with the proposed [general transmission] rates", in that "the CTOC
credits are a component of a `CTOC Adjustment' in the cost of
service used to determine [GSU's] basic rates to all of its
transmission customers". 59 F.E.R.C. at 61,140 & n.74 (emphasis
added).
GSU asserts that only the formula for determining the CTOC
Adjustment is stated. FERC explained that the CTOC Adjustment is
"the difference between Cajun's CTOC credits and Cajun's
equalization payments" -- in other words, the net credit given
Cajun for its ITS investment. Id. at 61,140 n.74. GSU asserts
that application of this formula in turn necessarily requires
calculation of actual CTOC credits (which, as noted, can be
determined only after the general transmission rates are fixed) and
actual equalization charges (which, as noted, are determined only
after each year-end true-up). Thus, GSU argues, the CTOC
Adjustment is by definition an estimate, in that both the CTOC
credits and the equalization charges are determined through formula
rates.
FERC does not respond to this contention, nor does it cite any
record support in its brief. The Rehearing Order cited only the
- 16 -

testimony of GSU witness James E. Striedel, see 59 F.E.R.C. at
61,140 n.74, which establishes only the formula described above.
At the December 1988 hearing before the ALJ, Striedel was asked,
"How are the CTOC credits reflected in ... the cost of service of
GSU's ... customers?" He explained the formula and replied, "That
net credit or what is called the CTOC adjustment is allocated as a
part of the cost of service to all customers ...".
In his prepared testimony submitted to FERC, Striedel again
was asked: "How does [GSU] reflect the CTOC credits and
equalization charge payments in determining the rates to its other
customers?" He replied: "The net credit received by Cajun is a
transmission service cost and is included in [GSU's] cost of
service studies and allocated to all jurisdictions which utilize
the integrated transmission system. This net credit given to Cajun
is called the CTOC Adjustment in [GSU's] cost of service." He also
explained that, in addition to removing GSU's revenue requirements
for the ITS, the CTOC credits "should further act to remove the
CTOC Adjustment" from Cajun's bills. As GSU points out, the
testimony makes no reference to what was actually filed with FERC
or included in the settlement agreements. Furthermore, no specific
CTOC credits nor any methodology for determining them is mentioned.
FERC failed to support with substantial evidence its
determination that the CTOC credits in issue were included in any
way in the respective settlements. Accordingly, we reverse. On
remand, GSU must be accorded a determination on the merits of the
"substantive questions with respect to Service Schedule CTOC"
- 17 -

presented by its allegations that the CTOC credits were calculated
erroneously prior to November 1987. The result of that
determination should then be applied retroactively to January 1,
1982, when the CTOC agreement first took effect.
2.
Our reasons for reversal with respect to retroactive changes
to the CTOC credits apply with equal force to prospective (post-
August 21, 1988) changes, but additional factors weigh heavily in
favor of GSU on this issue. Foremost is FERC's nearly four-year
delay in resolving this dispute, which would have cost GSU
approximately $16 million.7 Although FERC's instruction to GSU to
file CTOC credit changes with its general transmission rate filings
will avoid future disputes, that instruction was not in place in
1988. Moreover, the errors GSU seeks to correct allegedly are
independent of the "methodology, procedures and data" used as the
basis for the rates on file, such that a new general transmission
rate filing would be unnecessary to correct them.
Previously, GSU had not been obligated to file CTOC credits
either under the CTOC agreement or by FERC. Substantial
disagreement was ongoing with respect to related aspects of the
agreement; specifically, the QTF dispute. Finally, the ALJ had
handed down a favorable ruling on the merits of the billing dispute
in 1989. Under these circumstances, GSU had no reason to
7
As noted, the amount in controversy with respect to the
alleged billing errors for CTOC credits is approximately $4 million
annually. As also noted, since November 1987, Cajun has paid the
revised CTOC credits.
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anticipate that a new filing of its general transmission rates
would be required in order to resolve the present dispute. For
these reasons, we reverse FERC's refusal to consider the changes
prospectively.
III.
In sum, we hold that FERC reversibly erred in denying GSU a
waiver of the filing requirement with respect to the pre-1988
Factor APM changes, and in refusing to consider GSU's requested
changes, both retroactive and prospective, to the CTOC credits.
The correctness of the proposed CTOC credit changes under the
contract and of the proposed Factors APM in relation to the 1982
and 1985 filed rates are issues to be resolved on remand.

For the foregoing reasons, FERC's orders are REVERSED, and the
case is REMANDED for further proceedings consistent with this
opinion.
REVERSED and REMANDED.
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