In a July 23, 2010 opinion, the United States Court of Appeals for the D.C. Circuit (“D.C. Circuit”) denied several appeals regarding the Calfornia Independent System Operator Corporation’s (“CA ISO”) Market Redesign and Technology Upgrade (“MRTU”) initiative, in which the CA ISO overhauled its tariff, markets and the technology it employs to administer those markets.  The FERC approved CA ISO’s revised tariff in four orders issued between 2006 and 2008.  The MRTU initiative was undertaken in response to the need for improvements in the wake of the California energy crisis earlier this decade. 

Sacramento Municipal Utility District, the Imperial Irrigation District, the City and County of San Francisco, and the San Diego Gas & Electric Company appealed to the D.C. Circuit.  The appeals related to three areas: (i) the incorporation of marginal loss charges into locational marginal prices, (ii) a new local resource adequacy requirement, and (iii) a congestion revenue rights mechanism. 

The DC Circuit turned away appeals, upholding FERC’s orders approving the changes embodied in the MRTU initiative.  The Court generally deferred to FERC’s findings and considerations of the various arguments put forth.  The full decision can be obtained at