FERC Considers Whether There Is a Place for Competitively Awarded Transmission Projects to Receive ROE Incentives

*Thank you to JaKell Larson, 2024 Akin Summer Associate, for her valuable collaboration on this article.

Interstate oil, liquid and refined products pipelines regulated by the Federal Energy Regulatory Commission (FERC) will soon be able to raise their transportation rates (provided they were set using FERC’s popular Index rate methodology) in the wake of a significant new decision by the District of Columbia Circuit (the D.C. Circuit) in Liquid Energy Pipeline Association v. FERC (LEPA).

On Wednesday, July 24, 2024, the U.S. House of Representative Committee on Energy and Commerce held a Subcommittee on Energy, Climate, and Grid Security hearing to review the Federal Energy Regulatory Commission (FERC or Commission) Fiscal Year 2025 Budget Request. Members of the Subcommittee had the opportunity to hear testimony from all five Commissioners, including FERC Chairman Willie Phillips and Commissioner Mark Christie, as well as the three recently confirmed commissioners, David Rosner, Lindsay See and Judy Chang. In addition to their prepared remarks, the five commissioners answered questions on FERC’s mandate to provide affordable and reliable electricity and natural gas services nationwide, while also ensuring it fulfills its primary mission of maintaining just and reasonable rates.

On July 9, 2024, the U.S. Court of the Appeals for the D.C. Circuit held that the Federal Energy Regulatory Commission (FERC or the Commission) erred in ordering refunds for certain bilateral spot market transactions in the Western Energy Coordinating Council (WECC) region that exceeded the $1,000/megawatt-hour (MWh) “soft” price cap for such sales.¹ Finding FERC failed to conduct a “Mobile-Sierra public-interest analysis” before “altering” those contracts by ordering refunds, the court vacated FERC’s orders and remanded the case to FERC for further proceedings.²

On June 28, 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which for 40 years required court deference to reasonable agency interpretations of federal statutes in certain circumstances, even when the reviewing court would read the statute differently. The Court ended “Chevron deference” and held that courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” In doing so, the Court upended a longstanding principle of administrative law that is likely to make agency decisions more susceptible to challenge in the courts.

We are pleased to share a recording of Akin and ICF’s recently presented “Powering Progress: Decoding FERC Order No. 1920” webinar, along with the program materials.

Join projects & energy transition partner Ben Reiter at Infocast's Transmission & Interconnection Summit, where he will moderate the “Dealing with the Impacts of Increased Interconnection Request Requirements and Costs” panel.

Join projects & energy transition partners Hayden Harms and Vanessa Wilson at Infocast's RNG & SAF Capital Markets Summit, where Hayden will moderate the "Investor Perspectives: Private Equity, Infrastructure Funds, & Strategies" panel, and Vanessa will moderate the "Opportunities in Other Biogas/Fuels Markets" panel.