D.C. Circuit Dismisses Transmission Line Cases Against FERC

Turn to the nation's most objective and informative daily environmental news resource to learn how the United States and key players around the world are responding to the environmental...

By Rebecca Kern

July 1 — A federal appeals court dismissed two cases against the Federal Energy Regulatory Commission that dealt with transmission companies' rights to build new transmission projects, finding in one case that such a provision was anti-competitive in nature.

The U.S. Court of Appeals for the District of Columbia Circuit dismissed a petition from Oklahoma Gas and Electric Co., an electric utility company in Oklahoma and Arkansas, and other utility intervenors. The July 1 ruling stripped the incumbent utilities of the ability to assert a right of first refusal to build new transmission facilities in their service areas, ( Okla. Gas and Elec. Co. v. FERC, 2016 BL 212617, D.C. Cir., No. 14-1281, 7/1/16 ).

The petitioners argued that the Mobile-Sierra doctrine protected their right of first refusal, which is a first choice to build new transmission for incumbent utilities in their service area. The doctrine, which was established in a 1956 Supreme Court ruling, requires FERC to presume that rates and terms established by contracts are “just and reasonable” and only permits FERC to overrule this if it concludes a contract could “seriously harm the public interest.”

However, FERC determined that the petitioners' right of first refusal was not protected by the Mobile-Sierra doctrine contained in their regional transmission organization membership agreement.

D.C. Circuit Judge Robert Wilkins agreed with FERC, writing in the opinion, “We hold that the Commission painted with a broader brush than necessary in applying potentially applicable Supreme Court precedent, but we deny the petition nonetheless because nothing in the Mobile-Sierra doctrine requires its extension to the anti-competitive rights of first refusal at issue here.”

Second Case Dismissed

In a second July 1 ruling, the court issued a brief, four-page per curiam judgment finding that American Transmission Systems Inc., a transmission facility that is a subsidiary of FirstEnergy Corp., didn't properly argue its right of first refusal provision in its rehearing process with FERC ( American Transmission Sys. Inc. v FERC, D.C. Cir., No. 14-1085, 7/1/16 ).

The court wrote, “The petitioners have preserved no argument that either of their agreements actually contained a right of first refusal for the Mobile-Sierra doctrine to protect. That leaves the court without jurisdiction.”

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Environment & Energy Report