Power & Pipes

FERC, CFTC, and State Energy Law Developments

On November 12, the Commission resolved two certified questions and held that retail ratepayers have the right to file complaints and protest transmission rates and wholesale power sales rates when some portion of the rates will be flowed through to their retail bill.[1] This issue arose after an individual, who is an end-use customer, challenged transmission formula rate inputs, i.e., costs that flow through to the customer’s retail electric bill. These inputs go to the transmission of electric energy in interstate commerce and not local distribution. The customer asserted that she will pay a portion of the transmission rate when it is flowed through her retail bill, which the Commission found to be injury in fact.

The Commission noted that its ruling is consistent with prior holdings in which courts and the Commission concluded that protecting consumers is one of the Commission’s primary objectives.[2] The plain language of section 306 of the Federal Power Act (FPA) explicitly authorizes any person to file a complaint with the Commission. The Commission recognized that FPA section 201 generally limits its jurisdiction to the transmission and sale of electric energy at wholesale in interstate commerce, but noted that section 201 does not limit participation in Commission proceedings. Additionally, it has consistently ruled that FPA section 206 gives indirect/retail customers standing before the Commission. The Commission also found that allowing retail customers to challenge transmission and wholesale power sales rates does not violate principles of federalism.

[1] Am. Elec. Power Serv. Corp, 153 FERC ¶ 61,167 (2015).

[2] Id. at P 17 (citing cases including PATH, 140 FERC ¶ 61,229 (2012), Pub. Sys. v. fERC, 606 F.2d 973 (D.C. Cir. 1979), NC WARN, 151 FERC ¶ 61,079 (2015), Ass’n of Businesses Advocating Tariff Equity v. Midcontinent Indep. Sys. Op., Inc., 149 FERC ¶ 61,049 (2014), and S. Union Gas Co. v. Natural Gas Co., 71 FERC ¶ 61,198 (1995)).