On February 18, 2010, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order granting Google Energy LLC (“Google Energy”) market-based rate authority effective February 23, 2010, finding that Google Energy meets the criteria necessary for a Category 1 seller in all regions.

Prior to voting for the order, FERC drew attention to Google Energy’s routine application for market-based rate authority at its monthly public meeting on February 18, 2010.  In a somewhat unusual move, FERC Commissioner Philip Moeller sought to soothe fears surrounding Google Energy’s latest venture.  Commissioner Moeller engaged in a period of question and answer with FERC Staff about what the order would mean and how the public would be protected.  FERC Staff assured Commissioner Moeller that Google Energy’s request was not unusual and compared it with requests by other large companies like Safeway, Kimberly Clark and Merck.  FERC Staff went on to remind the audience and Commissioner Moeller that Google Energy was required to provide assurances that they did not have horizontal or vertical market power.   Commissioner Moeller concluded the question and answer period by stating, “Hopefully, that will calm any waters that are out there that may have been troubled.” 

On December 23, 2009, Google Energy filed an initial application with FERC for market-based rate authority (see January 15, 2010 edition of the WER).  Notice of Google Energy’s filing was published in the Federal Register, with comments due by January 13, 2010.  California Public Utilities Commission filed a motion to intervene out of time on January 14, 2010, which FERC granted.

As FERC Staff explained at the February 18, 2010 FERC meeting, in order to qualify for market-based rate authority, Google Energy had to provide information to satisfy FERC that neither it nor its affiliates had horizontal or vertical market power.  FERC found that Google Energy satisfied this requirement and did not own or control any wholesale electric generation facilities or own, operate or control any transmission facilities.  Additionally, FERC found Google Energy’s claim sufficient that it had not erected any barrier to entry in any relevant market. 

The full order can be found on FERC’s website at www.ferc.gov under docket ER10-468-000.