Overview
Following Steptoe’s issuance of a client alert regarding Public Citizen, Inc. v. FERC,[1] the House of Representatives passed a new bill to amend the Federal Power Act (FPA) so that any party may seek rehearing or judicial review of a rate change that takes effect without a Federal Energy Regulatory Commission (FERC) order approving the change. The bill is now headed to the Senate Committee on Energy and Natural Resources.[2]
Under Section 205 of the FPA, a rate takes effect 60 days after submission to the commission if the commission does not issue an order suspending or rejecting the rate. [3] In Public Citizen, the commission deadlocked 2-2 on whether to approve the results of ISO-NE’s forward capacity auction (FCA 8). The commission was unable to issue an order, and the results of the auction took effect by operation of law.[4]
A number of parties challenged this outcome, but the DC Circuit held that it was unable to provide relief, reasoning that when an outcome is the result of inaction on the part of FERC, there is no final agency action it can review. As stated by the court, “FERC did not engage in collective, institutional action when it deadlocked on the FCA 8’s rates.”[5] The court noted that while there may be "unfairness associated with this outcome," it required "Congress, not this Court, to provide the remedy."[6]
On January 17, 2017, Representative Joseph Kennedy of Massachusetts (which is in the ISO-NE footprint) introduced House Resolution 587, the “Fair Ratepayer Accountability, Transparency, and Efficiency Standards Act” or the “Fair RATES Act.”[7] Under the bill, any absence of commission action which allows a rate change to effect is treated as an order issued by the commission accepting the rate change for purposes of Section 313 of the FPA, which governs rehearing and judicial review of FERC orders. Put simply, the bill amends the FPA so that the commission and the courts may review altered rates - regardless of whether they are the result of FERC action or inaction. Steptoe will continue to monitor the progress of the bill.
[1] https://www.ferc.gov/legal/court-cases/opinions/2016/14-1244opn.pdf (Public Citizen).
[2] The bill passed the House of Representatives on January 23, 2017 and was referred to the Senate Committee on Energy and Natural Resources on January 25, 2017.
[3] 16 U.S.C. § 824d.
[4] See http://www.steptoe.com/assets/htmldocuments/fercnotice.pdf.
[5] Public Citizen at 8.
[6] Id. at 17.
[7] See https://www.congress.gov/bill/115th-congress/house-bill/587.
