Full opinion text
AMENDED OPINION THOMAS, Circuit Judge. This case comes to us on petitions for review of a series of orders issued by the Federal Energy Regulatory Commission (“FERC”) relating to the energy crisis that occurred in California in 2000 and 2001. Nearly 200 petitions for review of the various FERC orders have been filed in our Court. We consolidated these petitions for administrative management. On November 24, 2004, we issued a consolidated order in this case separating certain issues for decision in two consolidated proceedings, the first of which we termed the “Jurisdictional Cases”; the second we termed the “Scope/Transactions Cases.” In the Jurisdictional Cases, we considered whether FERC’s refund authority extended to certain governmental entities. We heard oral arguments on Jurisdictional Cases on April 12, 2005, and issued an opinion concerning the Jurisdictional Cases on September 6, 2005. Bonneville Power Admin. v. FERC, 422 F.3d 908 (9th Cir.2005). The Scope/Transaction Cases before us here involve numerous questions pertaining to the proper scope of FERC’s refund orders, including the appropriate temporal reach and the type of transactions properly subject to the refund orders. We heard oral arguments on the Scope/Transaction Cases on April 13, 2005. This opinion covers the issues presented in the Scope/Transaction Cases. We grant relief in part and deny relief in part. In general, we hold that all the transactions at issue in this case that occurred within the California Power Exchange Corporation (“CalPX”) or California Independent System Operator (“Cal-ISO”) markets, or as a result of a CalPX or Cal-ISO transaction, were the proper subject of the refund proceedings instituted by FERC. Therefore, we deny the petitions for review that challenge FERC’s inclusion of such transactions; we grant the petitions for review that challenge FERC’s exclusion of such transactions. We deny the petitions for review that seek to expand FERC’s refund proceedings into the bilateral markets beyond the CalPX and Cal-ISO markets. In particular, we hold that FERC properly excluded from the refund proceedings bilateral transactions between the California Energy Resources Scheduling (“CERS”) Division of the California Department of Water Resources and other entities that occurred outside the CalPX and Cal-ISO markets. We hold that FERC properly established October 2, 2000 as the refund effective date for the § 206 proceedings, rather than October 29, 2000, as argued by some parties. However, we hold that FERC erred in excluding § 309 relief for tariff violations that occurred prior to October 2, 2000. We reserve consideration of all other issues raised in the various petitions for review for the next phase of our appellate proceedings. The net effect of our decision is to preserve the scope of the existing FERC refund proceedings, but to expand those refund proceedings to include: (1) tariff violations that occurred prior to October 2, 2000, (2) transactions in the CalPX and Cal-ISO markets that occurred outside the 24-hour period specified by FERC, and (3) energy exchange transactions in the CalPX and Cal-ISO markets. I Parties and Claims With that brief summary of the issues, we turn to the specific claims of the parties. The State of California and several intervenors (collectively, “the California Parties”) seek review of a number of FERC’s decisions, namely: (1) FERC’s denial of relief for sales of electricity made at unjust rates prior to October 2, 2000, the refund effective date set by FERC; (2) FERC’s denial of relief for energy sales in which CERS was the purchaser; (3) FERC’s refusal to order relief for energy exchange transactions; and (4) FERC’s refusal to order relief for certain forward market transactions. A group of energy suppliers and generators called the Competitive Suppliers Group also petitions for review of several of FERC’s decisions, namely: (1) FERC’s decision to set the refund effective date at October 2, 2000, rather than October 29, 2000; (2) FERC’s order of refunds for transactions that took place during non-emergency hours, and (3) FERC’s inclusion of certain out-of-market transactions in its refund proceedings. The Port of Oakland, along with other petitioners and intervenors, petitions for review of FERC’s decision to exclude certain bilateral transactions from its refund order. Also before us in this case are the Public Entities’ and the Bonneville Power Administration’s petitions for review of FERC’s determination that it had authority to order relief for certain transactions known as “sleeve” and “multi-day” transactions, as well as transactions occurring under § 202(c) of the Federal Power Act. The California Parties have moved to strike, and El Paso Merchant Energy Company has moved to defer, consideration of the arguments until the next phase of our consideration of the FERC orders. II Factual Background During the mid-1990’s, FERC began examining whether the wholesale electric power industry should have been restructured and deregulated to separate generation, transmission, and distribution functions. Generation involves the production of power through a variety of means. Transmission generally refers to the conveyance of high voltage electric power from the points of generation to substations for conversion to delivery voltages. Distribution refers to the delivery of the converted low voltage energy from substations to individual consumers. The theory behind separating these functions, known as “unbundling,” was that wholesale power competition would be promoted, and consumers would benefit, if public utilities were required to provide nondiscriminatory, open access, transmission. See Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public Utilities, 60 Fed.Reg. 17,662 (proposed April 7, 1995) (codified at 18 C.F.R. § 35.0 et seq.)- This examination culminated in the issuance of FERC Order No. 888 in 1996. Order No. 888, Promoting Wholesale Competition Through Nondiscriminatory Transmission Services by Public Utilities, 61 Fed.Reg. 21,540, 21,541 (May 10, 1996) (“FERC Order No. 888”), on reh’g, 62 Fed.Reg. 12,274 (Mar. 14, 1997), on reh’g, 62 Fed.Reg. 64,-688 (Dec. 9, 1997), on reh’g, 82 F.E.R.C. ¶ 61,046 (Jan. 20, 1998), aff'd Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C.Cir.2000) (per curiam), aff'd sub nom. New York v. FERC, 535 U.S. 1, 122 S.Ct. 1012, 152 L.Ed.2d 47 (2002). Among other provisions, FERC Order No. 888 included a series of regulations that provided for the creation of competitive markets for wholesale electric power, including the creation of independent regional transmission companies that would allow the development of a competitive electric transmission market. Prior to these events, the California electricity market was composed of investor-owned utilities, whose generation, transmission, and distribution of electricity were vertically integrated and regulated by the California Public Utilities Commission (“CPUC”), the state agency charged with regulating retail electricity rates. Cal. Pub. Util.Code § 451. The CPUC set retail electrical rates charged by the investor-owned utilities providing service in exclusive service territories. There are three major investor-owned utilities in California: Pacific Gas and Electric Company (“PG & E”), Southern California Edison Company (“Edison”), and San Diego Gas and Electric Company (“SDG & E”). In response to FERC Order No. 888 and energy problems in 1995, the CPUC and the California legislature commenced initiatives to restructure the California electric energy industry. The aim was to convert California’s investor-owned, regulated utilities, to a deregulated market, in which the price of electricity would be established by competition, and consumers could select their electrical power supplier. The theory was that competition would lead to better service and a price reduction for consumers. Toward this end, the California legislature enacted Assembly Bill 1890 (“AB 1890”). Act of September 23, 1996, 1996 Cal. Legis. Serv. 854 (codified at Cal. Pub. Util-Code §§ 330-398.5). The deregulation was to proceed in several phases, beginning with the deregulation of the wholesale electricity market. After a transition period during which the investor-owned utilities were to recover their “stranded costs” through fixed prices for electricity, the retail market was to be deregulated. Under AB 1890, the major investor-owned, vertically integrated utilities were required to divest a substantial portion of their power generation plants, including fossil fuel generation plants (but excluding hydroelectric facilities and nuclear power plants), to unregulated, non-utility producers. This divestiture was accomplished by a process of market valuation, based on a discount of projected future revenue streams. See Order Instituting Rulemak-ing on Commission’s Proposed Policies Governing Restructuring California’s Electric Service Industry and Reforming Regulation, 64 CPUC 2d. 1, 1995 WL 792086 (Dec. 20, 1995) (“CPUC Decision 95-12-063”). Between 1998 and 1999, 22 electrical generation plants were sold. After divesting the bulk of their generation assets, the investor-owned utilities were required to sell all of their remaining output to CalPX, a nonprofit wholesale clearing-house created by AB 1890. CalPX was to provide a centralized auction market for trading electricity. It was deemed a public utility pursuant to the Federal Power Act, see 16 U.S.C. § 824(e), and thus subject to regulation by FERC, see 16 U.S.C. § 824(b), (d). It operated pursuant to a FERC-approved tariff and FERC wholesale rate schedules. Pacific Gas & Elec. Co., 77 FERC ¶ 61,204 at 61,803-05, (1996), reh’g denied, 81 FERC ¶ 61,122 (1997). The investor-owned utilities were required to purchase all of the electrical energy that they required from the CalPX markets and to conduct all of their sales through the CalPX market. Part of the underlying theory was that the investor-owned utilities could not exercise market power in a single transparent market, either as a buyer or a seller, because prices would be posted and all market participants would be paid the same price. CalPX commenced operations in 1998. Initially, it operated only a single price auction for its “spot markets,” defined as “sales that are 24 hours or less and that are entered into the day of or day prior to delivery.” San Diego Gas & Elec. Co., et al., 95 FERC ¶ 61,418 at 62,545 (“June 19, 2001 Order”). The price in the CalPX spot market was determined by evaluating bids submitted by market participants. As we described the procedure in Public Utility Dist. No. 1 of Snohomish County v. Dynegy Power Marketing, Inc. (“Dynegy”), 384 F.3d 756, 759 (9th Cir.2004): A seller could submit a series of bids that consisted of price-quantity pairs representing offers to sell (e.g. 5 units at $50 each, but 10 units if the price is $100 each). Similarly, a buyer could submit a series of bids that consisted of price-quantity pairs representing offers to buy. The PX would then establish aggregate supply and demand curves and set the “market clearing price” at the intersection of the two curves. Once the market clearing price had been established, “every exchange would take place at the market clearing price, even though some buyers had been willing to pay more and some sellers had been willing to sell for less.” Id. The CalPX spot market, or “core market” as it is sometimes called, consisted of: (1) “day-ahead” trading, in which the market clearing price was derived from the sellers’ and buyers’ price and quantity determinations for the next day’s energy transactions and (2) “day of’ or “hour-ahead” trading, in which CalPX would determine on an hourly basis, a single market clearing price which all suppliers would be paid. Purchases made in the CalPX spot market were deemed by CPUC to be “prudent per se.” See CPUC Decision 95-12-068, 1995 WL 792086 at *26-*27. In practice, the CalPX spot market generated considerable price uncertainty. Therefore, CalPX started a division, termed CalPX Trading Services (“CTS”), to operate a block forward market by matching supply and demand bids for long term electricity markets. In 1999, CalPX allowed the investor-owned utilities to purchase only a limited percentage of their combined load in the CTS forward market. They were required to purchase the balance of their load in the CalPX spot market. AB 1890 created another nonprofit entity, the Independent System Operator (“Cal-ISO”), also subject to FERC jurisdiction, which was to be responsible for managing California’s electricity transmission grid and balancing electrical supply and demand. Although the investor-owned utilities continued to own the transmission facilities, Cal-ISO exercised -operational control over the grid. The Cal-ISO grid included the transmission systems of PG & E, Edison, SDG & E, and the cities of Vernon, Anaheim, Banning, and Riverside, California. To maintain the grid, Cal-ISO was authorized to procure both energy needed to balance the grid (“imbalance energy”) and operating reserves (sometimes referred to as “ancillary services”). The imbalance energy market is the so-called “real time” market, in which bids to supply energy were to be made no later than 45 minutes prior to the operating hour. Cal-ISO would rank the supply bids and purchase the required energy at the market-clearing price. Cal-ISO would then bill CalPX for electricity it required. CalPX would, in turn, bill the investor-owned utilities, who were forced to pay whatever price that Cal-ISO paid its suppliers, even though that price might have exceeded what the utilities could have charged their consumers as a consequence of the retail price freeze. Because Cal-ISO was responsible for ensuring that all electricity demand was met, Cal-ISO was required to buy energy outside the CalPX market to make up the energy shortfall if sellers in the CalPX market were unable.or unwilling to provide enough supply to meet California’s demand during a particular period. Cal-ISO acquired operating reserves, constituting capacity that could be converted to energy and delivered to the grid in response to unexpected events, such as power outages, from ancillary services suppliers who would agree to reserve capacity during the specified period. The ancillary suppliers would agree to supply the required electricity during the specified period on demand from Cal-ISO, and were to be paid regardless of whether their capacity was used. All of these operations were to be governed by a tariff and protocols filed with FERC. As we now know, something happened on the way to the trading forum, and the best laid regulatory plans went astray. The plan to establish a competitive market, while keeping the exercise of monopoly and monopsony power in check, failed to account for energy economics and the sophistication of modern energy trading. As became clear in hindsight, even those who controlled a relatively small percentage of the market had sufficient market power to skew markets artificially. In short, the old assumptions, based on antitrust theory, that market power could not be exercised by those who possessed less than 20% of the market share proved inaccurate in California’s energy market. With the new structure, over 80% of the transactions were being made in the spot markets — the converse of most other electricity markets, in which more than 80% of transactions are made through long term forward contracts, lending stability to the markets. Sellers quickly learned that the California spot markets could be manipulated by withholding power from the market to create scarcity and then demanding extremely high prices when scarcity was probable. The energy market is highly dependent upon weather; heat waves or cold snaps inevitably produce demand. Thus, it was quickly apparent to sellers that there was little risk and great profit in withholding capacity when high demand was anticipated based on weather forecasts. In addition, traders soon developed other purely artificial means of market manipulation, such as shutting down power plants when electric demand was high in order to destabilize the electric grid, and to increase prices. In order to maximize profit, traders engaged in anomalous bidding practices, including “hockey-stick bidding,” in which an extremely high price is demanded for a small portion of the market, and “round trip trades,” in which an entity artificially creates the appearance of increased revenue and demand through continuous sales and purchases. Enron Corporation allegedly gamed the California markets with impunity, using manipulative corporate strategies, such as those nicknamed “FatBoy,” “Get Shorty,” and “Death Star.” Under the “Death Star” strategy, Enron allegedly sought to be paid for moving energy to relieve congestion without actually moving any energy or relieving any congestion. All of the demand was created artificially and fraudulently, creating the appearance of congestion, and then satisfied artificially, without the company providing any energy. “Fat-Boy” refers to a strategy through which Enron allegedly withheld previously agreed-to deliveries of power to the forward market so that it could sell the energy at a higher price on the spot market. The company would over-schedule its load, supply only enough power to cover the inflated schedule, and thus, leave extra supply in the market, for which Cal-ISO would pay the company. Via the “Get Shorty” strategy, traders were able to fabricate and sell operating reserves to Cal-ISO, receive payment, then cancel the schedules and cover their commitments by purchasing through a cheaper market closer to the time of delivery. The California Parties allege that Em-on was not alone and that other entities engaged in fraudulent power scheduling to serve false load schedules and adopted other manipulative strategies. Beginning in May 2000, energy prices in California began to escalate dramatically. Low cost hydroelectric power from the Northwest was not available in the volume of previous years, and wholesale electricity prices skyrocketed, particularly in the CalPX spot markets. In May 2000, the average prices in the CalPX spot market were double those of May 1999. On June 14, 2000, energy consumers in Northern California experienced their first wave of rolling blackouts. The California Parties allege that this occurred because of market manipulation. They claim that the data indicates that the large California generators utilized economic or physical withholding strategies 94% of the time during the May through November 2000 period. Under its operating procedures, Cal-ISO would declare a “System Emergency” when its operating reserves dipped below a predetermined percentage of its projected demand. Whenever reserves in California fell below seven percent, the ISO declared a “Stage 1 System Emergency.” June 19, 2001 Order, 95 FERC ¶ 61,418 at 62,546. The hours during which Cal-ISO declared a system-wide emergency are also called “reserve deficiency hours.” San Diego Elec. Co., et al., 97 FERC ¶ 61,275 at 62,246 (2001) (“December 19, 2001 Order”). During the summer of 2000, high temperatures and lack of supply forced the Cal-ISO to declare system emergencies 39 times. See San Diego Elec. Co., et al., 93 FERC ¶ 61,121 at 61,353 (2000). In addition to blackouts, brownouts, and system emergencies, the crisis proved enormously expensive to purchasers of retail power, who were unable to pass along the increased cost to their consumers. In June 2000, California spent more on purchasing energy than in the entire summer of 1999. This increase occurred despite the fact that peak demand was lower in 2000 than in 1999. The California investor-owned utilities, who were still subject to the price freeze that was supposed to lock in their profits, lost billions of dollars. Cooler weather in the fall did not cool prices. Prices continued to escalate throughout the last quarter of 2000. In August 2000, SDG & E filed a complaint under § 206 of the Federal Power Act, 16 U.S.C. § 824e(a), against all sellers of energy and ancillary services in the CalPX and Cal-ISO markets. SDG & E requested that FERC impose a price cap on sales into those markets. Other parties, including PG & E and the State of California, joined the complaint. On August 23, 2000, FERC issued an order denying the relief requested by SDG & E, but determining that it was appropriate to investigate the justness and reasonableness of the rates for all sales in the CalPX and Cal-ISO markets. San Diego Gas & Elec. Co., et al., 92 FERC ¶ 61,-172(2000) (“August 23, 2000 Order”). Therefore, it established its own investigatory proceeding in FERC Docket Nos. EL-00-95 and EL00-98 (“the Remedy Proceedings”). The August 23, 2000 Order established October 29, 2000 as the refund effective date, which was determined by calculating the date sixty days after publication of notice of the order in the Federal Register. Id. at 61,608. On November 1, 2000, FERC issued an order proposing structural changes to the operation of the CalPX and Cal-ISO markets. San Diego Gas & Elec. Co., et al., 93 FERC ¶ 61,121 (2000) (“November 1, 2000 Order”). In the November 1, 2000 Order, FERC concluded that: [T]he electric market structure and market rules for wholesale sales of electric energy in California are seriously flawed and ... these structures and rules, in conjunction with an imbalance of supply and demand in California, have caused, and continue to have the potential to cause, unjust and unreasonable rates for short-term energy (Day-Ahead, Day-of, Ancillary Services and real-time energy sales) under certain conditions. Id. at 61,349. FERC concluded that there was “clear evidence” that sellers could “exercise market power when supply is tight” and produce “unjust and unreasonable rates” for wholesale power sales. Id. at 61,349-50. The November 1, 2000 Order proposed, effective sixty days after the date of the order, to (1) eliminate the requirement that the investor-owned utilities buy and sell power exclusively through the CalPX; (2) require market participants to schedule 95 percent of their transactions in the day-ahead market or be-subject to a penalty charge; (3) replace the existing CalPX and Cal-ISO stakeholder boards with independent non-stakeholder boards; and (4) require the filing of generator interconnection procedures. In addition to ordering structural and rule changes, FERC ordered an evidentia-ry hearing to determine -the appropriate refund. At the behest of the California Parties, FERC changed the refund effective date from October 29, 2000 to October 2, 2000, based on the filing of the SDG & E complaint. FERC also limited the refund to Cal-ISO and CalPX spot market transactions completed during the period from October 2, 2000 through June 20, 2001 (hereinafter referred to as the “Refund Period”). Emergency conditions continued following the issuance of the November 1, 2000 Order, requiring Cal-ISO to serve increasingly larger portions of its load through the real time imbalance energy market and depleting Cal-ISO’s operating reserves. As a result, Cal-ISO proposed changes to its tariff, which FERC approved in an order dated December 8, 2000. Cal. Indep. Operator Corp., et al., 93 FERC ¶ 61,239 (2000). One provision of this order lifted the Cal-ISO price caps, with the goal of attracting more supply into the auction markets. On December 15, 2000, FERC issued an order substantially adopting the remedies proposed in the November 1, 2000 Order. San Diego Gas & Elec. Co., et al., 93 FERC ¶ 61,294 (2000) (“December 15, 2000 Order”). The December 15, 2000 Order attempted to reduce the reliance on spot markets by terminating CalPX’s wholesale rate schedules, thereby eliminating the requirement that the investor-owned utilities buy and sell all generation through CalPX. CalPX sought a writ of mandamus from our Court challenging the December 15, 2000 Order’s prohibition of the investor-owned utilities’ selling power on a voluntary basis in the CalPX market and the termination of the wholesale tariff. The City of San Diego also challenged the December 15, 2000 Order by writ of mandate, arguing that FERC had unreasonably delayed taking action on the purchasers’ requests for refunds. We denied those petitions on April 11, 2001. In re Cal. Power Exch. Corp., 245 F.3d 1110 (9th Cir.2001). On December 26, 2000, Edison filed a suit against FERC, alleging that it had failed in its responsibility to ensure that wholesale electricity was sold at reasonable rates. The CalPX market began to collapse and the investor-owned utilities were fast becoming insolvent. On January 17, 2001, the Governor of California declared a State of Emergency and ordered the California Department of Water Resources to purchase energy on behalf of California consumers to halt the rolling blackouts. Subsequently, the California legislature on February 1, 2001 enacted Assembly Bill 1 of the 2001-2002 First Extraordinary Session authorizing the Department of Water Resources to purchase power until December 31, 2002. Cal. Water Code § 80000, et. seq. Following the Governor’s declaration, CERS began buying power on January 18, 2001. Energy sellers began refusing to sell to Cal-ISO, and instead sold directly to the investor-owned utilities and CERS through bilateral contracts. Most sales after January 18, 2001 were made directly to CERS, rather than through CalPX or Cal-ISO. CalPX ceased market operations on January 30, 2001 and filed for protection under Chapter 11 of the Bankruptcy Code on March 9, 2001. The California Parties allege that from January 18, 2001 to June 18, 2001, CERS purchased more than $5 billion of energy in the spot market. On March 1, 2001, the California Electricity Oversight Board (“Cal-EOB”) filed a motion with FERC, asking FERC to clarify that the Remedy Proceedings included CERS transactions outside of the CalPX and Cal-ISO markets. The Cal-EOB contended that the sellers that had manipulated the markets were now charging the same or higher rates for the CERS sales. On March 9, FERC issued an order establishing a provisional formula governing refunds during the January 2001 period. San Diego Gas & Elec. Co., et al., 94 FERC ¶ 61,245 (2000) (“March 9, 2001 Order”). The order directed wholesale sellers to provide refunds or, alternatively, to justify their charges and costs for transactions made during power emergencies that were above a rate it calculated as appropriate. FERC estimated that approximately $69 million in January 2001 electricity sales would be subject to refunds. On April 6, 2001, PG & E filed a voluntary petition in bankruptcy pursuant to Chapter 11 of the Bankruptcy Code. Although Edison and SDG & E were in similar financial peril, they avoided bankruptcy filings through arrangements with creditors. On April 26, 2001, FERC issued an order establishing a prospective mitigation and monitoring plan for wholesale prices through the real time markets operated by Cal-ISO. San Diego Gas & Elec. Co., et al., 95 FERC ¶ 61,115 (2001) (“April 26, 2001 Order”). The April 26, 2001 Order established a pricing mechanism for sales by California generators made to Cal-ISO when reserves fell below seven percent. The order also established conditions, including refund liability, for market-based rate authority with the goal of preventing anti-competitive bidding behavior in the real time Cal-ISO market. On June 19, 2001, FERC issued an order reaffirming that “as a result of the seriously flawed electric market structure and rules for wholesale sales of electric energy in California, unjust and unreasonable rates were charged, and could continue to be charged during certain times and under certain conditions, unless certain targeted remedies were implemented.” June 19, 2001 Order, 95 FERC at ¶ 62557. The June 19, 2001 Order imposed price caps on all spot market sales from June 20, 2001 through September 30, 2002, and imposed a “must-offer” obligation on generators to prevent them from withholding supply. The prospective price mitigation plan applied to all sellers that voluntarily sold power into the Cal-ISO and other designated spot markets, or that voluntarily used Cal-ISO’s or other interstate transmission facilities subject to FERC jurisdiction. According to the California Parties, the effect of the June 19 Order was to put an end to the rolling blackouts, catastrophically high prices, and near-continuous power emergencies. On July 12, 2001, the Administrative Law Judge (“ALJ”) issued a report and recommendation to FERC regarding a refund methodology to govern sales during the Refund Period. San Diego Gas & Elec. Co., et al., 96 FERC ¶ 63,007 (2001). In response to the report and-recommendation, FERC issued an order on July 25, 2001 in the Refund Proceedings establishing the framework for refunds of past sales in the spot markets operated by CalPX and Cal-ISO. San Diego Gas & Elec. Co. et al., 96 FERC ¶ 61,120 .(2001) (“July 25, 2001 Order”). FERC ordered limited refunds for the rates it had determined to be unjust and unreasonable and established a mitigated market clearing price (“MMCP”) in an attempt to replicate what it believed to be the just and reasonable rates that an unmanipulated competitive energy market would have produced. Under the MMCP methodology, refunds were to be determined by the difference between the market clearing price, which was the price charged by all electricity suppliers at a given time, and the MMCP calculated for each hour of the Refund Period, subject to certain adjustments. FERC also ordered an evidentiary hearing to calculate the appropriate MMCPs for each hour of the Refund Period and the amount of refunds owed. However, FERC declined to order refund relief for sales that occurred before the Refund Period, or for any sales outside of the CalPX and Cal-ISO markets. FERC also excluded transactions of more than twenty-four hours in length, even if those sales were made in the CalPX and Cal-ISO markets within the Refund Period. The California Parties contend that refunds for sales prior to the Refund Period would total $2.3 billion in seller overcharges; that refunds for emergency purchases made by CERS would total $3.5 billion in seller overcharges; and that other improperly excluded transactions would amount to over $200 million in seller overcharges. On December 2, 2001, Enron Corporation filed a voluntary petition in bankruptcy under Chapter 11 of the United States Bankruptcy Code. On December 19, 2001, FERC issued another order addressing mitigation of the California spot market prices and conditions. December 19, 2001 Order, 97 FERC ¶ 61,275, et. seq. The order clarified that the price mitigation plans applied to all sales into the FERC-regulated spot markets and provided further explanation for why FERC chose October 2, 2000 as the refund effective date. FERC issued an order denying rehearing of the December 19, 2001 Order on May 15, 2002. On February 13, 2002, FERC opened a non-public investigation (“FERC Enforcement Proceeding”) pursuant to 18 C.F.R. § lb.l et. seq. into seller market manipulation of the energy markets in the Western United States. FaeWFinding Investigation of Potential Manipulation of Elec. & Natural Gas Prices, 98 FERC ¶ 61,165 at 61,614 (2002).' FERC noted that allegations had been made in the Enron bankruptcy that Enron had used its market position to distort electric and natural gas markets. FERC directed its staff to investigate “whether any entity, including Enron Corporation (through its affiliates or subsidiaries), manipulated short-term prices in electric energy or natural gas markets in the West or otherwise exercised undue influence over wholesale prices in the West, for the period January 1, 2000, forward.” Id. In June 2002, some of the California Parties moved this Court for permission to present additional evidence of market manipulation in the Remedy Proceedings. FERC opposed the motion. On August 21, 2002, we directed FERC to allow the parties to present evidence of market manipulation in the Remedy Proceedings, to reconsider its earlier orders denying relief, and to provide to the Court supplemental findings of fact and any recommended modifications to FERC’s orders on the basis of such new evidence. On March 20, 2002, the State of California, through its Attorney General, filed a complaint alleging that generators and marketers selling power into markets operated by CalPX and Cal-ISO, as well as those making spot market sales of energy to CERS, violated § 205 of the Federal Power Act by failing to comply with various filing requirements. The complaint also challenged FERC’s approval of market-based tariffs. On May 31, 2002, FERC dismissed the complaint as constituting a collateral attack on prior FERC orders and denied the complaint with respect to the allegations that FERC’s market-based rate filing requirements violated the Federal Power Act as a matter of law. State of California ex rel. Lockyer v. B.C. Power Exch., et al., 99 FERC ¶ 61,247 (2002) (“May 31, 2002 Order”). California filed a petition for review of the May 31, 2Q02 Order. In December 2002, the ALJ determined that suppliers owed approximately $1.8 billion to Cal-ISO and CalPX for sales at rates in excess of a just and reasonable rate. San Diego Gas & Elec. Co., et al., 101 FERC ¶ 63,026 (2002). FERC adopted in part, and modified in part, the ALJ’s proposed findings in an order issued March 26, 2003 Order, 2003. San Diego Gas & Elec. Co., et al., 102 FERC ¶ 61,317 (2003) (“March 26, 2003 Order”). In its March 26, 2003 Order, FERC stated that it would not alter any of its previous orders in the Remedy Proceedings concerning the time or transaction limitations in light of the evidence presented to the ALJ. This position was reaffirmed in subsequent FERC orders on October 16, 2003, which also clarified some refund calculation issues. San Diego Gas & Elec. Co., et al., 105 FERC ¶ 61,066 (2003); San Diego Gas & Elec. Co., et al., 105 FERC ¶ 61,065 (2003). Subsequently, FERC issued a number of orders pertaining to calculation of refunds during the Refund Period. San Diego Gas & Elec. Co., et al., 107 FERC ¶ 61,165 (2004); San Diego Gas & Elec. Co., et al. 107 FERC ¶ 61,166 (2004); San Diego Gas & Elec. Co., et al., 108 FERC ¶ 61,311 (2004), and San Diego Gas & Elec. Co., et al., 109 FERC ¶ 61,219 (2004), order on reh’g, 109 FERC ¶ 61,074 (2004). On September 9, 2004, we granted in part California’s petition for review challenging the May 31, 2002 Order. State of California ex rel. Lockyer v. FERC, 383 F.3d 1006 (9th Cir.2004) {“Lockyer”). We held that FERC’s decision to approve market-based tariffs in the wholesale electricity market did not violate the Federal Power Act. Id. at 1013. We also held that FERC erred as a matter of law in concluding retroactive refunds were not available under § 205. Id. at 1015. We remanded the case to FERC for further proceedings. Before us in the instant case are those portions of the petitions for review that involve the Scope/Transaction issues. We review FERC orders to determine whether they are “arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence, or not in accordance with law.” Cal. Dep’t of Water Res. v. FERC, 341 F.3d 906, 910 (9th Cir.2003). FERC’s factual findings are conclusive if supported by substantial evidence. 16 U.S.C. § 825i (b); Bear Lake Watch, Inc. v. FERC, 324 F.3d 1071, 1076 (9th Cir.2003). Substantial evidence “means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (quoting Eichler v. SEC, 757 F.2d 1066, 1069 (9th Cir.1985)). “If the evidence is susceptible of more than one rational interpretation, we must uphold [FERC’s] findings.” Id. We review questions of law de novo. Am. Rivers v. FERC, 201 F.3d 1186, 1194 (9th Cir.1999). We review FERC’s interpretation of the FPA under the familiar analysis established in Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), and its progeny. Bonneville Power Admin., 422 F.3d at 914. Ill Temporal Scope of Refunds Under § 206(a) of the Federal Power Act, FERC may investigate whether a particular rate or charge is “just and reasonable.” 16 U.S.C. § 824d(a). If FERC finds a rate unreasonable, it must order the imposition of a just and reasonable rate. Id. § 824d(d). FERC may then order refunds for any period subsequent to the “refund effective date,” a date FERC establishes that must be at least sixty days after the filing of the complaint. Id. § 824e(b). Under the express language of § 206, however, FERC may not order refunds for any period prior to the filing of the complaint. Id. Section 309 of the Federal Power Act, on the other hand, gives FERC authority to order refunds if it finds violations of the filed tariff and imposes no temporal limitations. Consol. Edison v. FERC, 347 F.3d 964, 967 (D.C.Cir.2003); 16 U.S.C. § 825h. In its August 23, 2000 Order, FERC established October 29, 2000 as the refund effective date pursuant to § 206. In its November 1, 2000 Order, FERC modified the refund effective date to October 2, 2000. The Competitive Suppliers Group argues that October 29, 2000 was the proper refund effective date. The California Parties do not dispute FERC’s establishment of October 2, 2000 as the refund effective date for the § 206 proceedings, but argue that FERC arbitrarily and capriciously refused to order refunds for tariff violations under § 309 for periods prior to October 2, 2000. A We conclude that FERC’s order establishing October 2, 2000 as the refund effective date for the § 206 Refund Proceedings was not arbitrary or capricious, an abuse of discretion, unsupported by substantial evidence, or not in accordance with law. SDG & E filed its initial § 206 complaint on August 2, 2000. In its response to SDG & E’s filing, FERC, in its August 23, 2000 Order, announced that it would commence its own investigation and set the refund effective date sixty days after FERC published an announcement of the investigation. The notice was published August 29, 2000; therefore, the refund effective date was set as October 29, 2000. On September 22, 2000, some of the California Parties, notably PG & E and Edison, requested that FERC establish an earlier refund date based on the filing of the SDG & E complaint, rather than on FERC’s commencement of the Enforcement Proceedings. Given SDG & E’s August 2, 2000 filing date, the earliest possible refund effective date was October 2, 2000. In the November 1, 2000 Order, FERC granted the request and reset the refund effective date to October 2, 2000. Thus, the question at issue here is whether FERC properly tethered the refund effective date to the SDG & E complaint. Although FERC denied the remedy sought by SDG & E in its complaint, it did not dismiss the SDG & E complaint; rather, it consolidated the SDG & E complaint with its own investigation “for purposes of hearing and decision in view of their common issues of law and fact.” December 19, 2001 Order, 97 FERC ¶ 61,275 at 62,198. Despite consolidation, FERC made it clear that the August 23, 2000 Order “established two separate, but related, investigations.” Id at 62,197. According to FERC, the investigation into the “justness and reasonableness of sellers’ rates in the ISO and PX markets” that resulted in the refund order grew out of SDG & E’s complaint. Id In addition, FERC noted that its policy “is to establish the earliest refund effective date allowed in order to give maximum protection to consumers.” Id at 62,198. This interpretation is consistent with FERC’s “primary purpose” in “protecting consumers.” Lockyer, 383 F.3d at 1017. The Competitive Suppliers Group argues that the SDG & E complaint cannot form the basis for establishing the refund effective date because SDG & E did not seek refunds pursuant to § 206 in its complaint, and third-party FERC complaints must specify relief sought. To be sure, § 206(a) requires third-party complaints to FERC to “state the change or changes to be made in the rate, charge, classification, rule, regulation, practice, or contract then in force.... ” 16 U.S.C. § 824e(a). It is also quite true that SDG & E did not seek a refund remedy in its initial complaint. SDG & E’s complaint sought an emergency order capping prices in the CalPX and Cal-ISO markets and a ruling enforcing the cap through limitations on market-based authorizations. However, the relief sought in the initial complaint is not dispositive of this issue. The key question is whether the SDG & E complaint afforded sufficient notice to alert market participants that sales and purchases might be subject to refund. The gravamen of the SDG & E complaint was that the rates charged by sellers were unjust and unreasonable. As FERC points out, a complaint challenging the reasonableness of the rates can lead to a refund under § 206, even if a refund remedy is not specifically designated in the initial complaint. FERC is empowered to investigate the reasonableness of a rate either in the context of a third-party complaint or sua sponte. Indeed, as we have noted, the Federal Power Act requires FERC to establish a refund effective date whenever it institutes a § 206 investigation. 16 U.S.C. § 824e(b). Further, some of the California Parties promptly sought rehearing of FERC’s initial determination of the refund effective date in its August 23, 2000 Order. In short, market participants were quickly apprised that the original refund effective date might be subject to revision. As FERC noted: “Requests for rehearing of the August 23 Order raising the refund effective date issue were timely filed. Thus, any reliance by sellers on the October 29 refund effective date prior to the issuance of a final order was at their own risk.” December 19, 2001 Order, 97 FERC ¶ 61,275 at 62,198. Therefore, because SDG & E’s § 206 complaint unquestionably could have led to a FERC refund order, because the original FERC order establishing the refund effective date was not final, and because rehearing petitions were timely filed challenging the refund effective date, SDG & E’s filing of its complaint provided sufficient notice to the market to satisfy § 206. The fact that two investigations were initiated by FERC does not alter this conclusion. The investigation initiated by SDG & E’s complaint focused on whether the sellers’ rates in the CalPX and Cal-ISO markets were just and reasonable; the separate FERC investigation focused on whether the CalPX and Cal-ISO market rules and institutional factors required modification. As FERC noted in its August 23, 2000 Order: While the SDG & E has focused on the performance of sellers in the market, the action of sellers may in part be caused by the current market rules and institutional structures. Accordingly, we conclude that it is appropriate to investigate not only the justness and reasonableness of public utility sellers’ rates in the PX and ISO markets, but also to investigate the tariffs and agreements of the ISO and PX to determine whether market rules or institutional factors embodied in those tariffs and agreements need to be modified. 92 FERC ¶ 61,172 at 61,606. In short, FERC launched a § 206 investigation into the justness and reasonableness of the rates pursuant to the SDG & E complaint and initiated its own investigation into the CalPX and Cal-ISO tariffs and agreements to determine whether market rules required modification. The Competitive Suppliers Group argues that the § 206 investigation became subsumed into the market investigation. However, this contention contradicts the plain language employed by FERC when it established the two investigations and the subsequent treatment of the investigations in later FERC orders. No substantive consolidation was ever ordered. Even if the cases had been substantively consolidated, consolidation would not necessarily eviscerate a validly established refund effective date based on the original SDG & E complaint. Refunds were eventually ordered as a direct result of the SDG & E complaint. Given all these considerations, we conclude that FERC did not act arbitrarily or capriciously, abuse its discretion, or act in violation of law in setting the refund effective date based on the SDG & E complaint. B FERC’s authority to order refunds for filed rates that are later determined to be unjust, unreasonable, or discriminatory derives from §§ 205 and 206 of the Federal Power Act. FERC also has remedial authority to require that entities violating the Federal Power Act pay restitution for profits gained as a result of a statutory or tariff violation. Consol. Edison, 347 F.3d at 967; Towns of Concord, Norwood & Wellesley v. FERC, 955 F.2d 67 (D.C.Cir.1992), S. Cal. Edison Co. v. FERC, 805 F.2d 1068, 1071-72 (D.C.Cir.1986). This authority derives from § 309 of the Federal Power Act, which authorizes FERC “to perform any and all acts, and to prescribe, issue, make, amend, and rescind such orders, rules, and regulations as it may find necessary or appropriate to carry out the provisions of this Act.” 16 U.S.C. § 825h. Unlike refund proceedings commenced under § 206, no time limits apply to remedial actions filed pursuant to § 309. In its July 25, 2001 Order, FERC declined to award any relief pursuant to § 309. The California Parties sought review of that decision. We granted the California Parties’ motion for an order requiring FERC to entertain further evidence of market manipulation and tariff violation and to reconsider its orders limiting remedies. After receiving further evidence, FERC ruled that it would not consider further remedies. March 26, 2003 Order, 102 FERC ¶ 61,317 at 62,083. The California Parties petition for review of FERC’s refusal to consider § 309 remedies. We conclude that FERC’s decision not to consider a § 309 remedy for tariff violations was arbitrary and capricious, an abuse of discretion, and not in accordance with law. On appellate review, FERC “must be able to demonstrate that it has made a reasoned decision based upon substantial evidence in the record.” N. States Power Co. v. FERC, 30 F.3d 177, 180 (D.C.Cir.1994) (internal quotations omitted). FERC must “articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Assn. of the U.S., Inc. v. State Farm, Mut. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). In this case, FERC offers several rationales for refusing to grant tariff relief. First, it claims that § 206 precludes refunds prior to the refund effective date. Second, it contends that no tariff violations occurred. Third, it argues that it need not provide remedies to the California Parties because it has commenced prosecutorial investigations into the question of whether tariff violations occurred, and those investigations may result in remedies which would make the market whole. None of these justifications is sufficient to sustain FERC’s decision under the applicable standard of review. First, FERC’s claim that it is precluded from ordering pre-Refund Period relief under § 206 may be quickly dispatched. The relief sought by the California Parties in this part of the proceeding is based on § 309, not § 206. Although the § 206 proceedings seeking refunds because of unjust and unreasonable rates are limited to the Refund Period, § 309 proceedings based on tariff violations are not. FERC’s apparent conclusion that the time limits applicable to § 206 proceedings also apply to § 309 proceeding is incorrect as a matter of law. Indeed, FERC emphasized as much in its own filings in the investigatory proceedings: Thus, with respect to the period prior to the October 2, 2000 refund effective date, the Commission can order disgorgement of monies above the post October 2, 2000 refunds ordered in the California Refund Proceeding, if it finds violations of the ISO and PX tariffs and finds that a monetary remedy is appropriate for such violations. Further, while refund protection has been in effect for sales in the ISO and PX short-term energy markets since October 2, 2000, the Commission can additionally order additional disgorgement of unjust profits for tariff violations that occurred after October 2, 2000 (i.e., to June 20, 2001). Enron Power Mktg., Inc., 103 FERG ¶ 61,-346 at 62,351 (2003). To the extent that FERC is claiming that the § 206 time limits apply to § 309 proceedings, FERC is wrong. Second, FERC alleges there were no tariff violations, contending that “there is no basis for finding that the sellers acted inconsistently with Commission-filed tariffs or with specific requirements in their filed rate authorizations.” July 25, 2001 Order, 96 FERC at 61,508. This conclusion is flatly inconsistent with FERC’s commencement of the FERC Enforcement Proceeding, which was initiated to investigate and prosecute tariff violations. It contradicts the conclusion of FERC staff, accepted by FERC, that bid prices in the pre-Refund Period were “excessively elevated solely for the purpose of raising prices” in violation of the Cal-ISO and CalPX rules. Investigation of Anomalous Bidding Behavior and Practices in the Western Markets, 103 FERC ¶ 61,347 at 62,360 (2003). FERC concluded that “the remedy for these tariff violations, if found to exist, would be the disgorgement of any unjust profits attributable to these tariff violations.” Id. at 62,359. FERC’s assertion in this proceeding that there were no tariff violations prior to the Refund Period is contravened by its own findings in American Electric Power Service Corp., to wit: As discussed below, the entities listed in the caption (Identified Entities) appear to have participated in activities (Gaming Practices), that constitute gaming and/or anomalous market behavior in violation of the California Independent System Operator Corporation’s (ISO) and California Power Exchange’s (PX) tariffs during the period January 1, 2000 to June 20, 2001, that warrant a monetary remedy of disgorgement of unjust profits and that may warrant other additional, appropriate non-monetary remedies. These determinations are based on certain of the tariffs’ provisions, an ISO study, a report by Commission Staff, and evidence and comments submitted by market participants. 103 FERC ¶ 61,345 at 62,328 (2003). See also Enron Power Mktg., Inc., 103 FERC ¶ 61,346. In addition to FERC’s own conclusions, the California Parties also presented significant evidence of pervasive tariff violations during the pre-Refund Period. In sum, there is no support for FERC’s second rationale for denying the California Parties’ request for pre-Refund Period relief. FERC’s third stated reason for denying the request is that it is pursuing tariff violations in the separate FERC Enforcement Proceeding. Obviously, this rationale contradict’s FERC’s second rationale — that no tariff violations exist. This reason for rejecting the California Parties’ request for § 309 relief is , also unsupportable. In explaining its third reason for denying the request, FERC describes at length its broad investigatory and prosecutorial authority under § 307(a) (16 U.S.C. § 825(f)) and § 309 (16 U.S.C. § 825h). However, no one disputes this authority. What FERC fails to explain, or support, is how its inherent authority to commence investigations and enforcement proceedings under 18 C.F.R. § lb.l et. seq. precludes a civil proceeding instituted by third party complaint. The two types of proceedings are quite distinct. One is investigative and prosecu-torial; the other is a contested proceeding. FERC enjoys broad discretion in the management of its own § lb prosecutorial investigations. FERC “[i]nvestigations may be formal or preliminary, and public or private.” 18 C.F.R. § lb.4. In contrast to an adjudicated, contested proceeding, in a § lb proceeding, FERC may settle claims without review, and need not justify its decision to order refunds, or to decline to order refunds. Because § lb investigations are prosecu-torial in nature, third parties do not participate. 18 C.F.R. § lb.ll. For example, in this case FERC denied the California Parties’ motion to intervene in the FERC Enforcement Proceeding, explaining: The Commission intends the proceedings listed in the caption of this order to proceed as investigative and, where appropriate, enforcement proceedings. Their purpose is to examine instances of potential wrongdoing and take remedial action where needed. The Commission is thus acting in a prosecutorial manner in these matters, rather than strictly as an adjudicator.... ... [This] has important implications, particularly with respect to potential in-tervenors. There are no parties to an investigative proceeding. 18 C.F.R. § lb.ll (2003). Moreover, only a pai'ty can contest a settlement, 18 C.F.R. § 385.602(h) (2003).... Another implication of the application is the Commission’s rules governing off-the-record communications. These rules apply only to contested, on-the-record proceedings; they do not apply to Part lb investigations unless the Commission specifically makes an exception to allow formal interventions and party status. 18 C.F.R. § 385.2201(c) (2003) .... ... Consequently, the Commission is treating all pending motions for intervention as motions to file comments and, to the extent the Commission to date may have erroneously allowed intervention, rescinding those interventions that have heretofore been granted. Fact-Finding Investigation of Potential Market Manipulation of Elec. & Natural Gas Prices, 105 FERC ¶ 61,063 at 61,352 (2003) Commissioner Massey dissented from this decision, writing: I do not agree that the investigation of Anomalous Bidding Behavior and Practices in the Western Markets should be treated exclusively as an investigation under Part lb and that there should be no parties to the proceeding. Much of the evidence supporting the investigation was adduced by parties pursuant to a court order in the California refund proceeding. The California parties are integral to the assessment of and weight to be given the evidence. The Commission should not decide, in isolated enforcement proceedings, issues upon which the court-ordered adduced evidence has a bearing where those that adduced the evidence are not parties and have no appeal rights. Id. at 61,353. At various times, FERC has stated that it reserves the right to impose market-wide inquiries in the FERC Enforcement Proceedings; however, in these proceedings to date, it has only pursued “company-specific” investigations into the actions of various market participants, rather than conducting a market-wide inquiry. San Diego Gas & Elec. Co., et al., 105 FERC ¶ 61,066 at 61,385. FERC itself casts its company-specific approach as supplemental to the adjudicative refund proceedings undertaken pursuant to § 206. See, e.g., San Diego Gas & Elec. Co., et al., 105 FERC ¶ 61,066 at 61,391 (“Any such company-specific disgorgement or other appropriate remedies would be in addition to the refunds associated with the mitigated market clearing prices developed pursuant to this order and could apply to conduct both prior to the Refund Period and during the Refund Period.”); 102 FERC ¶ 61,108 at 61,289 (2003) (“The payment to be made by Reliant will be in addition to any refund ultimately owed by Reliant as part of the refund proceeding in Docket No. EL00-95, et al.”). In contrast, the California Parties seek a market-wide refund remedy for tariff violations pursuant to § 309 through its adjudicative filing. The fact that FERC may be seeking similar remedies against specific companies in its § lb investigations does not justify its denial of the California Parties’ request for § 309 relief. When parties seek adjudicative relief from an agency, they are entitled to a reasoned response from the agency. Here, the California Parties filed a cognizable request for relief and tendered credible evidence in support of their request. A party’s valid request for relief cannot be denied purely on the basis that the agency is considering its own enforcement action that may impart a portion of the relief sought. If an aggrieved party tenders sufficient evidence that tariffs have been violated, then it is entitled to have FERC adjudicate whether the tariff has been violated and what relief is appropriate. In sum, none of the reasons given by FERC for refusing to adjudicate whether tariffs were violated is sustainable. Section 309 relief is not limited by § 206. FERC’s determination that no tariff violations occurred is not supported by the record. FERC cannot avoid adjudicating a third-party petition because it may or may not choose to commence a separate enforcement action. For these reasons, we conclude that FERC’s categorical rejection of the California Parties’ request for § 309 relief was arbitrary, capricious, and an abuse of discretion. Therefore, we grant the petition for review as it pertains to the California Parties’ challenge to FERC’s foreclosure of relief for tariff violations. We deny the California Parties’ petition insofar as it calls for us to decide the merits of its request for § 309 relief. We do not prejudge how FERC should address the merits or fashion a remedy if appropriate. FERC cannot, however, categorically refuse to entertain the application; it must address the merits. IY Out of Market Spot Transactions FERC’s July 25, 2001 Order mandated retrospective relief for sales to Cal-ISO, including out-of-market (“OOM”) transactions. These purchases were made by Cal-ISO from sellers outside the Cal-ISO single price auction market within 24 hours or less of delivery, and served to stabilize the grid when supply was insufficient to meet demand. Because Cal-ISO had no choice but to buy energy to ensure grid reliability, potential sellers were in a position to exercise improper market leverage by exploiting the structural flaws in the market. FERC concluded that the OOM transactions provided the best opportunity for extracting unjust and unreasonable rates and therefore, made them subject to potential refunds. The Competitive Suppliers Group petitions for review of FERC’s decision to include OOM sales to Cal-ISO because (1) FERC made no express finding that the rates charged for OOM sales were unjust and unreasonable and (2) the Remedy Proceedings had been limited since their inception to the Cal-ISO/CalPX single-price auction market. We deny this petition for review. A Section 206(a) of the Federal Power Act requires that before FERC can exercise its remedial power to mitigate an existing rate, it must find an existing rate “unjust, unreasonable, unduly discriminatory or preferential.” 16 U.S.C. § 824e(a); Fed. Power Comm’n v. Sierra Pac. Power Co., 350 U.S. 348, 353, 76 S.Ct. 368, 100 L.Ed. 388 (1956). The Competitive Suppliers Group argues that although FERC made a finding that prices within the auction markets were unjust and unreasonable, they never made such a finding with respect to OOM sales to Cal-ISO. In its July 25, 2001 Order, FERC adopted the MMCP to calculate just and reasonable rates for Cal-ISO and CalPX. The MMCP was the benchmark for determining the amount of refunds that sellers had to pay — FERC simply looked at them transactions during the refund period and then ordered them to pay the difference between the rate and the MMCP. Application of the MMCP was a determination that a rate was unjust and unreasonable. As FERC explains in its brief, [Bjecause the conditions under which [Cal-ISO] OOM spot transactions were entered into made it likely that the rates for those transactions were unjust and unreasonable, FERC required that all transactio