Supreme Courts Denies Review of FERC Market-Based Rate Case

The U.S. Supreme Court on Monday denied review of a case in which several states and citizen groups contend that the Federal Energy Regulatory Commission’s (FERC’s) Order 697—issued in 2007 to improve market-based rate regulations—exceeds FERC’s authority under the Federal Power Act (FPA).

In the case Public Citizen et al. v. Federal Energy Regulatory Commission, et al. (Case No. 11-1009), the states of Connecticut, Illinois, and Rhode Island; the Montana Consumer Counsel; Colorado Office of Consumer Counsel; and public interest groups Public Citizen and the Public Utility Law Project of New York legally challenged the FERC order. They say it allowed “sellers of wholesale electric power to charge ‘market rates’ for electricity and to avoid the Federal Power Act’s requirements that rates be just and reasonable and that all changes in rates be filed with FERC before they go into effect.”

After the U.S. Court of Appeals for the Ninth Circuit last October upheld FERC’s order, saying that it did not violate the FPA, the states and citizen groups appealed to the Supreme Court, petitioning the high court to review the case. FERC was backed by the Electric Power Supply Association (EPSA), a national trade association representing competitive power suppliers, including generators and marketers.

In a statement on Tuesday, EPSA applauded the Supreme Court’s denial of the petition for review filed by Public Citizen and three state attorneys general. The court’s action "avoids the disruption to wholesale power markets that would have occurred had the Court decided to take up a review of the Ninth Circuit case," the industry organization said.

"It is instructive that each of the courts of appeal that have considered the matter has upheld FERC’s authority to allow wholesale power suppliers to transact under market-based rates consistent with the Federal Power Act. It is important to note that FERC took meaningful steps to improve the market-based rate program under Order 697 at issue in this case," it added.

Sources: POWERnews, FERC, EPSA

—Sonal Patel, POWER senior writer (@POWERmagazine)

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