On October 5, 2009, the National Association of Regulatory Utility Commissioners (“NARUC”) and a group of state utility regulators filed a brief requesting that the Supreme Court overturn a June 23, 2009 decision by the United States Court of Appeals for the D.C. Circuit (“D.C. Circuit”) regarding jurisdiction over capacity requirements.
In Connecticut Dept. of Public Utility Control v. FERC, the D.C. Circuit found the Commission has authority to approve installed capacity requirements for ISO New England, Inc. (see July 10, 2009 edition of the WER). The D.C. Circuit indicated that although FERC is prohibited by section 201 of the FPA from regulating generation facilities, nothing in the law prevents FERC from reviewing capacity requirements. The Connecticut Department of Public Utility Control filed a petition for a writ of certiorari of this decision on September 3, 2009, and NARUC and other state regulators submitted their brief in support on October 5, 2009.
The brief asserts the D.C. Circuit erred by allowing FERC to set the level of installed capacity requirements and by accepting FERC’s rationale that FERC is “merely regulating practices affecting wholesale rates” when doing so. The petition also claims the D.C. Circuit was wrong to consider installed capacity merely as a market input affecting rates. Rather, installed capacity is a requirement imposed on load-serving entities (“LSEs”), intended to ensure such LSEs meet consumer needs. Finally, the brief asserts the FPA is very specific in limiting federal authority, and the D.C. Circuit ignored that while guaranteeing future litigation between the states and FERC.